Life expectancy is one of those topics that should always come up in conversations about financial planning. Financial professionals may ask, “How long do you plan to live?” and “Do you have enough money to live at your current lifestyle until that age?”
Yet, do they ask about your current health? The median age today’s workers plan to live to is 90 years old, with 32 percent planning to live to at least 90, according to nonprofit Transamerica Center for Retirement Studies. That means some people could spend 23 years or more in retirement. But, really what good is all the money you’re socking away, if you’re not healthy enough to live to 90? Or, healthy enough to enjoy all those years?
Now may be the time to look at how your health is linked to your wealth strategies. A 2017 global survey shows that people who are in good or excellent health have a more positive outlook about their retirement and are taking more steps to prepare for it.
Chicken or egg?
Does this data mean that if you have retirement savings and a retirement plan, you’re more likely to take care of your health? Or, conversely, that if you’re in excellent health you’re more likely to save for retirement? Perhaps it’s the chicken and egg causality dilemma.
And, in the long run, does it really matter? It may be important to do both — focus on your physical and emotional health while formulating saving strategies for retirement. With a two-pronged approach, you’ll have both sides of the equation covered. One will follow from the other in a circular flow. Let’s look at some strategies that may help you align your finance and fitness plans to keep you on the left side of this graph.
Exercise to reduce healthcare costs
Regular exercise can save you $2,500 in annual healthcare costs, according to the American Heart Association. They recommend at least 150 minutes per week of moderate exercise or 75 minutes a week of vigorous exercise. It’s easiest to remember 30 minutes a day, five times a week. We always knew the benefits of exercise were worth something. Now we actually have a price tag.
Bag your lunch
Another simple way to eat healthier — that may also help you save money — is to pack your lunch instead of dining out. Packing your lunch or eating at home five times a week can save you $2,746 annually, according to a Visa Lunch Survey. When you pack a lunch at home, you can also make healthy decisions before the “Hangry Monster” grips you, causing a dash for the vending machine.
Optional wealth protection strategies
Making changes to diet and adding exercise may help prevent some people from developing chronic diseases, according to the article, Prevention of Chronic Disease by Means of Diet and Lifestyle Changes. And, although you never plan to get a major illness, you may want to examine the long-term cost of living with a chronic disease like heart disease, diabetes, cancer, or dementia. What if you acquire an unforeseen illness in the not-so-distant future? Although medical costs may be covered or at least offset by insurance, what other costs are associated with living with one of these diseases?
Medical expenses can more than double between ages 70 and 90. Cancer.net produces data to help readers understand costs related to cancer care. Will you or your partner potentially need nursing care, ongoing alternative treatment like physical therapy, or special medical equipment? And have you planned for a worst-case scenario? If you die or your partner dies, will the survivor have income from life insurance? We've brought up a few potential long-term, health-related financial issues that do have solutions. You may want to discuss them with a financial professional.
Think about the best home for you in the long run
Consider these questions when thinking about where you’d like to live after you retire. Since where you end up will effect both your wealth + health, you may want to ask yourself these questions using the wealth + health lenses:
- Do you want to be near family and friends?
- Do you want public transportation nearby?
- How much room do you need after kids leave home?
- Do you want to reduce risks associated with weather and natural disasters?
- How much property do you physically want to manage?
- Is your current home already paid off?
- If you like your current home, will it be navigable as you get older?
- Do you want to live in an activity-friendly neighborhood that provides walkable paths and streets?
Watch this video to learn more about creating the ideal retirement abode. If you start the creative process now, considering what will work for you, financially, physically, and emotionally, you may be able to design a strategy to get there, when the time comes.
So, which comes first — wealth or health? It’s up in the air. Feel free to consider ways that you can improve your health that will influence your long-term wealth. And, vice versa.
Join the wealth + health conversation in our Community.
Things to Consider
- Brew your coffee at home; you can save $1,200 annually.
- Ask your financial professional about long-term care and life insurance .
- Start researching your ideal retirement locale and home .