My mother and stepfather worked hard throughout their lives to accumulate enough assets for a comfortable retirement. They wanted to go anywhere and do whatever they wanted, whenever they wanted.
Fast forward to today, and a significant amount of time and money is spent on health care needs during retirement. Both men had several chronic illnesses, but many of their current health issues can be traced back to lack of exercise in their 60s and 70s. A lack of physical strength and stamina combined with a sedentary lifestyle eventually led to my father-in-law's serious health conditions, forcing him to retire early and sell his business unexpectedly. These major life changes are often financially devastating. Fortunately, their finances were stable enough to handle these surprises, but their current health conditions prevent them from enjoying their dream retirement.
On the other hand, my father and stepmother are physically healthy and mentally very alert. By their own choice, they continue to work until their mid-70s, when retirement is just around the corner. They have the means to retire, but continuing to work only improves their economic status and strengthens their mental and physical health. Staying overall healthy has allowed me to do the things I enjoy most, like traveling and spending as much time as possible with my grandchildren.
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This “tale of two retirements” highlights the important symbiotic relationship between health and wealth. To ensure you're setting yourself up for a long and healthy retirement, you need proper financial planning that looks at you as a whole.
How health and wealth work together
Health care costs continue to be one of retirees' largest expenses.by Fidelity retiree medical cost estimate, a 65-year-old couple retiring today can expect to pay about $315,000 in medical expenses, including the most expensive medical expenses for retirees: medicines, dental care, and long-term care services. It doesn't even include any additional costs. .
by Community life administration, 70% of retirees will need long-term care at some point, and the costs can be incredibly high.a Genworth Research shows that today's average semi-private nursing home room costs $8,390 per month, and home assistance costs $5,462 per month. After 20 years, the same monthly cost increases to about $23,133 for a semi-private nursing home room and $15,059 for home health care (assuming 5% medical inflation).
But health issues can cost more than just dollars. Most of my mother and stepfather's time is spent visiting doctors' offices, preparing for procedures, and recovering, which deprives them of the opportunity to enjoy quality time with friends, family, and most importantly, their grandchildren. It is. It even affected their own relationship, as my mother became more than just a loving wife and a full-time caregiver.
A lack of interpersonal connection can lead to feelings of loneliness and depression. 1 in 3 retirees Many people develop depression during their golden years, and dealing with ongoing health issues is a common cause.
While that may be important, health does not trump finances.You may be the healthiest person on the planet, a dedicated yogi who eats a plant-based diet and engages in regular activities, but building a healthy nest egg that is tax-sheltered If this is not possible, in the future
Medical costs and other retirement risks may make it difficult to maintain the quality of life you desire.
Financial security and health are both important. You can't enjoy one without the other. True success comes from finding a balance between the two.
Health and wealth planning tips
Few financial advisors take the time to address their big picture when planning for retirement. But as my parents' “two-time retirement story” shows, planning for retirement is an important part of the process. It may sound scary, but it doesn't have to be that complicated. Here are five easy steps to help you get started.
Build an estate plan. This is essential for financial success in retirement. Estate planning is more than just saving money in a 401(k) or Roth IRA. We work on everything from tax strategy and Social Security optimization to investment strategy and income planning. Planning should focus on protecting your assets as you approach retirement, providing safeguards such as stress tests and distribution strategies to ensure you have the financial means to support your retirement, no matter how long you live. there is.
Plan to live longer. A customized estate plan should be designed to help you maintain your lifestyle, even if you live to be 90 years old. Even if you end up living a shorter life, your loved ones can benefit from the wealth you create but don't spend. On the other hand, if you only have enough retirement savings to last until age 75, and you end up living another 20 years, you will experience many years of financial hardship, and your loved ones will probably lose their family. will have to take on the responsibility of taking care of. you. Planning your retirement with longevity in mind will ensure your needs are always met.
Prioritize your overall health now. If my parents could go back in time, I'm sure they would behave differently regarding their health. Learn from their mistakes and make lifestyle adjustments now to stay healthy throughout your life. Even small changes can add up to a big impact.
Some people are more prone to certain complications; research result That your lifestyle can help you cause or avoid those health complications. Pay close attention to your nutrition and keep moving as you age. Simple daily movements can change your life. Walk just 6,000 steps a day According to a study published in the journal Circulation, it has been proven to dramatically reduce the risk of cardiovascular disease. According to , habits such as self-reflection and gratitude habits can help reduce toxic stress loads. CDC and Mr. Tammen Jadad Garcia and Dr. Alex Jadadauthor of Health no matter what: Humans are hardwired to adapt.. If left unchecked, toxic stress can seriously damage your physical and mental health.
I may not be a health expert, but I'm married to one and I've seen the power of a healthy lifestyle firsthand. If you want to continue doing the activities you love and create memories with your grandchildren and other loved ones in retirement, make sure your lifestyle aligns with that goal.
Let's think about nursing care insurance. Even if you take good care of your mental and physical health, it's important to plan ahead for potential medical needs. Out-of-pocket medical expenses in retirement can be expensive, and Medicare can't cover all your needs. Traditional or hybrid long-term care insurance policies can supplement your regular insurance or Medicare coverage and help protect your retirement assets from the hundreds of thousands of dollars in costs associated with long-term care claims.
Life insurance can also act as a type of long-term care insurance, as it allows you to receive a death benefit for long-term care needs. We recommend consulting with a financial professional who specializes in long-term care planning to find the right level of protection for you.
Create a post-retirement system. The transition to retirement can be difficult. With your daily work schedule gone, it can be difficult to find a new sense of purpose. Needless to say, maintaining social connections can be difficult, and loneliness has been shown to increase the risk of heart disease, dementia, stroke, depression, and anxiety. U.S. Surgeon General’s Recommendations on Social Connections and the Healing Effects of Communities.
Once your career ends, it's up to you to maintain structure and purpose in your life. Find a new passion project, like woodworking, crafting, or hiking. Connect with community groups like book clubs, sewing circles, and religious groups. Consider volunteering at a local nonprofit. I once worked with retirees with children who ran nonprofits, and they joined boards as a way to stay connected to their families and make an impact in their communities.
Some people choose to work a few hours a week and take partial retirement to stay busy. This can also be financially beneficial because the income you earn will meet your needs and may allow you to postpone starting Social Security benefits or withdrawing money from your retirement account. It doesn't matter how you want to spend your time, as long as you find a new purpose in life.
A truly comprehensive financial plan should address your entire health: financially, physically, mentally, and relationally. Living a long life should not be a financial burden, but rather something to be celebrated, knowing that you worked hard to build a retirement life filled with healthy habits and the means to support it. A successful retirement depends on finding the balance between health and wealth to live out the life you've earned.
