Good health may preserve your nest egg
As you build your retirement savings, is there a key investment you're overlooking?
Even with safety nets such as Medicare in place, healthcare expenses can take a big bite out of your retirement savings. If maintaining your health isn't already one of your retirement priorities, it's time to reassess your investment in you.
Poor health can cost you
Saving money through careful and diligent planning is generally an essential part of a more successful retirement — but you could be undercutting your efforts if you're not also taking a proactive approach to good health.
According to a February 2012 EBRI study (PDF) Expenditure Patterns of Older Americans, healthcare expenses are retirees' second largest outlay of money next to housing — and unlike other expenses, healthcare costs take up a larger and larger portion of the budget as the years go on.
Maintaining good health may help reduce the number of doctor visits or hospital stays you need in retirement, making it a critical cost-saving component of your retirement planning strategy. In fact, 69 percent of workers1 (PDF) today believe it's important to stay physically healthy to avoid major healthcare expenses later in life.
Good health pays off
Though you can't predict your health in retirement, there are plenty of reasons to do all you can to help stay as healthy as possible:
- You'll feel better, have more energy and get more enjoyment out of your retirement years.
- You'll be able to devote more of your savings to things other than medical expenses — such as travel or preserving an estate.
- With regular checkups, your doctor may be able to detect medical problems early on when they're most treatable.
- If you choose to or must continue working, good health could help you stay on the job. This can be personally rewarding as well as provide you with a retirement income stream.
Consider that Social Security benefits continue to increase the longer you wait to tap into them. If you work until age 70, you can anticipate monthly benefits 32.5 percent higher than they would have been if you tapped into your benefits at age 65.2 (However, if working is no longer an option because of health issues, your financial professional can help you plan an income strategy that can work for your retirement.)
Start investing in your health
Exercise regularly. Adopt a routine that incorporates a mix of strength training, flexibility, balance and cardio activities. Always talk with your doctor before beginning any exercise program.
Eat well. Follow a balanced diet that emphasizes fruits and vegetables, whole grains and lean protein. Drink plenty of water to replenish your system, and avoid foods laden with fats, sugars and salt. And drop the extra weight: Researchers at George Washington University's Department of Health Policy3 found that the annual cost of being obese — reflected in medical expenses, loss of productivity, life insurance premiums and more — is $4,879 for a woman and $2,646 for a man.
Shake bad habits. Strive to break behaviors that work against a healthy lifestyle, such as smoking, overeating or drinking too much. There's also a direct financial benefit for adopting healthy habits. For one: Depending on where they live, smokers who quit a pack-a-day habit can save $1,430 to $3,3204 (PDF) annually — and put that money toward their retirement savings.
Reduce stress. Stress and anxiety can be detrimental to good health. Deep breathing, meditation and listening to music are all good ways to decompress.
Know your numbers. From cholesterol to blood pressure to blood sugar, keep track of your test results and know if your numbers are in the acceptable range. Discuss any variances with your doctor.
Make sure you're saving enough for a long and healthy retirement. Use this calculator to help you determine if you're on track.
Find out how a financial professional may be able to help you prepare for retirement.