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The Often Overlooked Retirement Wealth Strategy

The Often Overlooked Retirement Wealth Strategy

March 04, 2024

Thirty percent of retirees said that a health problem was a factor in their decision of when to retire.*

Per the 2022 study, Fidelity Retiree Health Care Cost Estimate, an average retired couple aged 65 should have approximately $315,000 to address healthcare expenses throughout their retirement.

As we navigate the ups and downs of life on a day-to-day basis, it's easy to overlook the profound impact that long-term health can have on our retirement plans and expected wealth during retirement.

The Health-Wealth Nexus: Long-term health plays a pivotal role in shaping the financial landscape of retirement. Chronic health issues, prevalent among retirees, can lead to exorbitant medical expenses that significantly impact one's overall wealth, as well as income in retirement. The most common health challenges include cardiovascular diseases, arthritis, diabetes, and cognitive decline, all of which may require extensive healthcare interventions.

Here's how you can hedge against major medical expenses in retirement:

Know Your Resources - To support long-term health in retirement, retirees can access various resources:

  1. Medicare and Medicaid: Understand the coverage provided by Medicare and Medicaid, ensuring comprehensive healthcare support during retirement.

  2. Health Savings Accounts (HSAs): Maximize the benefits of HSAs, allowing tax-advantaged contributions for qualified medical expenses.

  3. Community Health Programs: Engage with local community health programs offering preventive care, wellness initiatives, and support networks.

Take Proactive Measures – Taking a proactive stance to safeguard your long-term health and, by extension, your wealth through proactive measures can keep significant problems at bay. Maintain regular health check-ups, a healthy lifestyle, and preventive care, significantly reducing the risk of chronic conditions.

Medical Funds: Unexpected medical emergencies or long-term care needs can derail even the most meticulous retirement plans. Exorbitant healthcare costs can deplete retirement savings rapidly. Exploring health insurance options, including long-term care insurance, can provide a safety net for potential medical expenses.

In the quest for long-term wealth, let long-term health be the cornerstone of your retirement narrative. By addressing potential health issues, understanding the financial toll of medical expenses, and accessing relevant resources, you can maintain a robust retirement strategy that prioritizes their physical well-being and financial security.

We are here to help; if you have questions or need assistance safeguarding your health and wealth, please reach out!

*SHED Report on the Economic Well-Being of U.S. Households in 2022 - May 2023