Your financial health has a lot to do with your physical health. Here are five health choices that contribute to financial well-being—now and into retirement.
Make healthcare planning part of your retirement plan.
If you’ve been participating in your employer’s health care plan, then you may find healthcare costs go up once you retire. In fact, some research shows that you can expect healthcare spending to double over the first 20 years of retirement.* This is the opposite of expenses like travel, which you’re likely to spend less on the further you get into retirement.
In addition to planning for routine healthcare expenses, like premiums and prescriptions, it’s a good idea to plan for the possibility of long-term care costs. To get an understanding of what you might be looking at in terms of healthcare costs in retirement, you can ask your financial advisor to help you create an estimate based on your current health and financial plan.
Make necessary health changes now—not later.
It goes without saying that if you’re in poor health in retirement, you’re likely to spend more on health care. You can’t change your family health history or have complete control over chronic health conditions, but you can take a hard look at your daily health habits and change those that aren’t contributing to a healthy lifestyle.
Here are a few adjustments you should consider making (where applicable) that can lower your healthcare costs in retirement:
- Quitting smoking
- Committing to a regular exercise program
- Incorporating more whole foods into your diet
- Making sure you’re seeing your doctor for routine well visits
- Getting health screenings on schedule
Put a strategy to your Health Savings Account (HSA).
You may already use an HSA to save and pay for current medical expenses, but did you know that an HSA can be an important piece of your investment portfolio? Similar to a 401k or IRA, contributions to an HSA are tax deductible in the year they are made. Also similar to other retirement funds, you can typically invest your HSA funds and let them grow over time. When you withdraw that money, it’s considered tax free (As long as you use it on for Qualified Medical Expenses).
And while some use accrued funds right away to pay for immediate medical expenses, it may be in your financial best interest to pay cash and allow your HSA funds to grow. At the time of distribution, you’ll have the option to reimburse yourself for qualified medical expenses that occured after you established your HSA.
Take advantage of all the wellness benefits offered by your employer.
Health insurance, HSAs and disability are just part of the health benefits packages offered by many employees. You might have access to certain benefits you don’t even know about: discount gym memberships or passes, onsite fitness centers or yoga classes, smoking cessation programs, wellness seminars or publications, or nutrition testing.
Not knowing what health and wellness opportunities your employer is already subsidizing on your behalf is like leaving money on the table.
Work with a financial advisor to reduce money-related stress.
Stress and anxiety about money is reported by 72 percent* of American adults, and ongoing stress about money has been linked to headaches, heart disease, chronic sleep troubles, and more.
When you work with a trusted advisor to make a personalized financial plan and ensure your finances are headed in the right direction, you can build confidence in your ability to financially prepare for your future.
Ready to learn more about how working with a financial advisor can help you prepare for health care costs in retirement? Contact us at Ironwood Wealth Management today.