One of the biggest concerns people might have is health care costs in retirement since it takes a big bite from your retirement money. CNBC shares that health care can be as much as 25% of a retiree’s overall income. That is a big percentage of your retirement money you could otherwise use for other areas in your life.
As you prepare yourself and your finances for retirement, you aim to pay off or at the very least, lower down your financial obligations. You do this so you can use the majority of your funds for activities you love to do in retirement. If not, most of your money would just go to credit card debt, mortgage, car, or even student loans.
The challenging part is trying to manage health care costs in retirement is that you are unable to predict the future. You never know how your health will be in retirement only that you would need to take good care of it as you age. You cannot stop time from advancing and you will soon see yourself needing more and more assistance when it comes to your health needs.
However, this does not mean that you cannot prepare for the expected healthcare costs you will encounter in retirement. If you leave everything up to chance, you could end up burning through whatever amount you have saved up for retirement in the first few years. You could be forced to go back to the workforce just to be able to make ends meet. Here are some areas you can focus on to help you manage that area of your golden age.
Save early for retirement
One of the best ways to address health care costs in retirement is to start saving early for it. This is a challenging idea for a lot of consumers especially the ones who are just starting to earn their own money. Retirement seems to be in the distant future that they cannot see the value of starting early with it. This is important as Northwest Mutual shares that only about 22% of Americans have any retirement savings.
Add the fact that there are challenges even early in the life of fresh college graduates such as student loans that do not make it easier for them to save for retirement. It is possible that at the beginning, saving for the future is not a priority. However, there are a lot of benefits to saving early in life for your future needs.
Saving early gets you into the habit of saving for it as time goes by. You do not need to start putting in huge amounts at the start because it is more important to get into the habit of saving for retirement. Another benefit you can enjoy when you put retirement in your priority list is that you get to retire when you want not when you can.
Look for healthy activity
You will have health care costs in retirement for a number of reasons but it all boils down to your body aging. Though there is nothing you can do to stop it, you can help your body age gracefully with a healthy activity you can do now to help your future self. You might think that all is good now even if you put in several all-nighters for work.
Think of your body much like how you make financial investments where what you put in is what you will get in the future. If you make sure that you save money frequently and make it a top priority, you will see your money grow over the years. Much like with how you take care of your health and body now is what you will get in the future.
Rather than just staying at home and channel surfing the nights and weekends or making it a habit to binge-watch a number of television series every day with chips and soda on hand, go out and find an activity. It can be running, walking, yoga, or even just clean the house. Clean the attic, the garage, get to that small house project of fixing the stairs or building a wall cabinet. Look for an activity that will allow you to move and be active.
Do not forego regular medical check-ups
Health care costs in retirement can include regular doctor’s appointments either for check-up or maintenance. As you plan for that and include that cost in your retirement planning, you do not have to wait until you are retired to go see your doctor. Much like how you visit your dentist once or twice a year for check-ups, you can do the same with your family doctor.
This will become more frequent as you age as your doctor could be including some additional tests to monitor your health. You need to stay on top of this before retirement, especially when you have a medical history in your family. It is important that you make sure you are checked regularly to keep an eye out on your health.
Make time to exercise
As you prepare for retirement with your health in mind, you need to be active at home. Sitting all day and watching tv or being in the living room most of the time hunched over your phone will not be good for your health. However, being active at home may not be enough especially as you age and you might to put a structure to be able to exercise on a regular basis.
Health care costs in retirement can be minimized when you enter your golden years on top of your health. Moving around at home might not be enough but a good start. Try light exercises like walking around the block every other night. Increase the frequency and then you can alternate walking and running on some days.
Exercise does not always mean hitting the gym and lifting weights day in and day out. It is a great addition if you can but it would be great if you can put in some variations in your routine. This can help give you a holistic approach and make sure that you get to exercise your whole body.
Create an environment where you can lower down stress
When you start to talk about health care costs in retirement, you need to make sure that you include mental health as well. One thing you can do now is to make sure that you avoid unnecessary stress which can affect your mental health. It can mean distancing yourself from negative people or even understanding the areas in your life you can control. Your mental health is just as important as your physical health.
Focus on a hobby and you might earn extra from it
One great way to help you lower down stress is to look at the things you already love doing and focus on that. If baking helps you manage your emotions, bake a little more especially on weekends. If you love to write poems, create a graphic design to help you channel anxiety or even frustration, do it more often and always have a sketchbook and pencil handy.
These hobbies can be a great way to help provide you with an outlet to better manage your mental health. It is also possible that these hobbies turn into income-positive opportunities. You get to do what you love and earn from it too. A bonus is that if your hobby revolves around a physical activity such as running or swimming, you get to improve your physical health as well. You might even end up as a coach to some up and coming athletes if you put enough time into your craft.
There is no denying that health care costs in retirement are on the rise but there are actionable areas in your life at present to help you prepare for that future cost.