Retirement, Health and $$$$

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The Cost of Health & Retirement

Ever wonder how much money it’ll take to retire, to afford a few fun trips, or get-away-weekends and still have enough to pay for things like your mortgage or health insurance?  Let’s face it, folks are living longer these days, thus it’s going to cost you more. Think about it, people to save sooner now for retirement because they’re living longer. The average life expectancy in the U.S. climbed from 69.77 in 1960 to 78.74 in 2015, according to the World Bank.  You are likely to live even longer once you reach certain milestones. For example, if you’re 65 today, you have a one in four chance of living past age 90, according to the Social Security Administration.

“People are in retirement 30 or 40 years now, which is a lot longer than before,” said Chris Miller, an investment advisor at Safeguard Investment Advisory Group. That means nest eggs need to be bigger to last longer. However, many people are underestimating how long they’ll live in retirement and aren’t saving enough, Miller said.

One Reason, Healthcare Costs Are Rising

People need more money in retirement now than in the past for healthcare costs. One reason is that retiree healthcare benefits provided by employers aren’t as prevalent now as 50 years ago, Collinson said, so retirees must cover more health costs on their own.   At the same time, healthcare costs keep rising — especially for retirees. For example, the average amount a 65-year-old couple who retired in 2016 would need to cover medical expenses in retirement was $260,000, according to Fidelity Investments. But a couple retiring in 2017 would need an average of $275,000, an increase of $15,000 over just one year. It pays to learn the retirement survival strategies for rising healthcare costs.

Another Thing to Keep in Mind, Long-Term Care Needs Are Increasing

The Fidelity healthcare cost estimates for retirees don’t include long-term care expenses. The increased need for long-term care — because people are living longer — is another reason it’s harder to save for retirement now, Collinson said.  “A couple of years ago, [Transamerica] did a survey of retirees and we found that many retirees financially say they’re living well, but looking at the savings they reported, many are potentially one financial shock away from bankruptcy,” she said. “Long-term care could very well be that shock.”

The annual cost of an assisted living facility is $45,000, and the annual cost of a private room in a nursing home is $97,455, according to the Genworth 2017 Cost of Care Survey. About half of people turning 65 will need long-term care at some point in their lives, according to the U.S. Department of Human Services. However, less than one-third of Americans 50 and older have begun saving for long-term care.

What To Do?

That old saying, “your Health IS your First Wealth” IS a real thing. Especially as costs continue to climb in health care and health insurances. The good news is that if you can ease into your retirement in reasonable good health, your costs may not be as dire as it first appears. By investing in your health NOW as well as setting money aside for your retirement NOW you will be paying it forward for yourself. In other words, spend a little extra on organic foods or high quality foods now, vs eating crap and paying your doctor later in life or higher insurance premiums. Pay for that gym membership NOW and maintain a healthy lifestyle now and you’ll reap the dividends of your investments later in life.

What does investing in your health NOW look like, well for starters, invest in high quality, healthy foods. Like visiting your local farmers markets, yes, sometimes it costs a bit more, but you are investing in YOURSELF. You’re creating healthy habits NOW that will follow you into your retirement years. That in itself is HUGE. Getting out and walking, hitting the gym, some sort of exercise at least 3 times a week at the minimum.

Interested in learning more about how to invest towards your HEALTHY retirement?

Contact me for your FREE consultation

 

Statics and financial information from article: MSN Money, Steps to boost your retirement savings

 

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