As we plan and prepare for our retirement years with happy anticipation, most of us are focused on the same basic steps; save as much as possible, invest our savings wisely and try to pay off debt. In addition to these basic steps, it’s our hope at Parsec that you have a detailed financial plan, meet with your advisor annually to see how you are progressing against the plan and make the necessary adjustments along the way. While all of these steps are vitally important to prepare for your post-work years, have you thought about the ability to sustain good health as it relates to financial security in retirement?
According to Fidelity Investments, a married couple who retired in 2020 will spend an average of $295,000 of their financial resources on health care throughout retirement. They estimate that about 15% of the average retiree’s annual expenses will be used for health care-related expenses, including Medicare premiums and out-of-pocket expenses. Also, if the need for long-term care arises, that will be an added expense. So what can you do today to lower future health care costs and put less strain on retirement resources? Make another wise investment … invest in your own good health!
Just like you have a financial plan to stay on track with spending and saving, make a plan to manage your health and hopefully reduce the impact of healthcare costs in retirement.
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Get an annual physical:
Understand your unique health risks and develop a plan with your health care provider to mitigate them.
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Improve your health habits:
Stop smoking, exercise regularly, maintain a healthy weight and choose nutritious food. Asheville-based cardiologist Dr. Brian Asbill spoke about the importance of lifestyle medicine to attendees at Parsec’s Longevity Forum in 2019. Read a recap from his talk, watch the full replay and download his presentation.
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Understand and manage the numbers:
Know your cholesterol and blood pressure numbers and work with your health care provider to get them to healthy levels.
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Manage stress and develop social networks:
Time spent with friends, family and pets can reduce stress and improve health.
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Maximize your HSA:
If you are still working and have a high-deductible health plan with a health savings account (HSA) component, be sure to maximize its triple tax benefit:
- Tax deductible or pre-tax contributions
- Tax-free earnings
- Tax-free distributions for medical expenses
My colleague Judson Meinhart delves into more detail about HSA accounts and their retirement benefits, read now.
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While we can’t control every health outcome, we can try to positively influence the future to reduce healthcare costs in retirement and enjoy a longer, healthier retirement.
Nancy Blackman, CFP®
