Save BIG on Your Health Care Costs in Retirement, Feel Happier and Live Longer
This is not an article about how to trick the Medicare system. I’m not going to suggest that you move abroad to save money on your health care costs. I don’t have a multi-level marketing (MLM) program for you to join or a magic pill that will suddenly solve all of your financial problems. I also can’t help the fact that many of your health care costs will be unavoidable, no matter how much you take care of yourself.
So, how can I possibly claim that you can potentially save thousands in retirement with almost no financial investment? Stick with me for just a few minutes and all will be revealed!
Preparing for Retirement Isn’t Just About Saving Money
Do a quick Google search for “retirement” and you will find millions of websites offering advice for how much money to save and where to put it to get the best return on investment.
You will hear the same advice over and over again – start early, save for the long term, max out your 401K and consider an IRA. This is good advice! But, I am here to tell you that saving for retirement isn’t all about how much money you stash away. It is also about the things that you can do now to lower your costs in retirement.
After all, as financial advisors love to say, “It’s not how much you make, but, how much you keep that counts!”
Let’s talk about one of the biggest costs that each of us can expect to pay in retirement. Then, I’ll explain why the traditional strategy for dealing with this cost falls short.
Health Care Costs in Retirement Could Reach $400,000! The Only Advice People Give is SAVE MORE!
According to a 2017 report by HealthView Services, health care costs are expected to rise by 5.4% a year in the coming decades. This means that, on average, when you take into account deductibles, hearing and vision, dental, out-of-pocket and other expenses, total health care costs, in today’s dollars could reach $400,000.
In an example given in the same HealthView report, a 65-year-old couple might expect to pay $321,994 in premiums and $82,258 in out-of-pocket expenses for “Medicare parts B and D, supplemental insurance premiums, dental premiums, and out-of-pocket expenses.”
While saving as much money as possible in the time you have left before retirement is important, I want to argue that it is just as important to make healthy lifestyle changes now that will protect your nest egg in your 70s, 80s and beyond.
Here are a few things that you can start doing today to potentially lower your health care costs in the future.
Stop Shooting Yourself in the Foot! Quit These Dangerous Behaviors
By the time we reach our 50s and 60s, there is a tendency to believe that “the damage has been done.” Perhaps this is why we see so many people our age sunbathing with a mojito in one hand and a cigarette in the other. Seriously, take a quick trip to a beach near you and you’ll see what I mean! It’s scary!
The truth is that, while we can never fully make up for the damage that we have done to our bodies, we can stop the bleeding, so to speak.
Do you still smoke? There are so many programs out there to help you quit. It is never too late! For example, according to this report in NPR, people who stop smoking in their 60s have up to a 23% lower chance of dying early.
Do you drink more than the occasional glass of wine? Maybe it’s time to give your liver and your wallet a break! In fact, because your body is less capable of metabolizing alcohol as you get older, your 50s or 60s may be the perfect time to quit, or at least commit to drinking less.
Do you think that there’s no point wearing sunscreen because “the damage has already been done?” Nothing could be further from the truth! The older you get, the less able your skin is to naturally defend itself against the harmful effects of the sun. So, give it a hand – wear 30+ SPF sunscreen, sit under an umbrella at the beach and wear a hat when you walk!
Get in Shape – Time is No Longer an Excuse!
I was just of guilty as the next person of letting myself go a big in my 30s and 40s. While I was at the peak of my corporate career, I didn’t feel that I could justify spending time at the gym. Of course, getting in shape would have probably increased my productivity, but, that’s another story!
The point is that, when we reach our 50s and 60s, we have the opportunity to invest in our bodies. Even if you are still working, your kids have probably left the house. This means that, for the first time in decades, you have the opportunity to reconnect with your body. Don’t let this chance slip away.
Having talked to 100s of men and women over 50 about their workout habits, I can tell you that the most successful approach is to start slow and build consistency. Here are a few examples:
Go for a 5 minute walk today. Increase your walk by one minute per day until you reach 60 minutes.
Do one push-up (on your knees if you have to). Increase by one per week until you reach 30.
Join a gym. Do one repetition on one machine. Then shower and leave. Increase by one per day.
Get Active by Being More Social
Reducing your medical costs in retirement isn’t just about staying physically healthy… it is also about staying mentally healthy! And, there is nothing better for your brain than having an active social life.
In fact, some studies have shown that loneliness can increase your chances of dying early as much as smoking or obesity. Sure, dying will solve your healthcare costs problem, but, I don’t think any of us would argue that this is a fair exchange!
So, to fight back against loneliness why not combine your physical activities with a little social interaction? Here are a few options to consider.
Is there a hiking club in your city that you could join?
Are there any sports that you have always wanted to try? Tennis? Golf? Tai Chi?
Do any of your friends have an interest in cycling?
Is there a community center near you that has cheap yoga, Pilates or aerobics classes?
The bottom line is that, while we should all be saving more for retirement, we should also be thinking of systematic ways to reduce our costs in the decades ahead. I can’t think of a better way to spend less, life longer and find happiness than by giving our bodies the respect they deserve.
Are you worried about how fast healthcare costs are rising for older adults? What are you doing to invest in your health today so that you will experience healthy aging tomorrow? Please join the conversation!