Medical expenditures are a big financial burden for most families, and when retirees are forced to rely on their children because they lack healthcare coverage, the issue becomes much more complicated, resulting in strained relationships.
The World Health Organization reports that the global average life expectancy was 72 years in 2016, which was an increase of 5.5 years since 2000. Even in Africa, where life expectancy remained at 62 years, it had climbed by 10.3 years since 2000, owing mostly to better healthcare systems.
There will be another anticipated increase by 2022, with the global average climbing to 73 years. This increased life expectancy means more years of retirement, which necessitates the introduction of appropriate measures to make it comfortable.
Preparing for retirement healthcare bills is a mixed bag of good and bad news. The good news? Longer retirements are becoming increasingly normal as life expectancy rises. The bad news? The cost of healthcare is constantly rising.
According to statistics, 60% of a person's medical costs are incurred when they reach retirement age.
So how do you even begin to think about putting together a retirement healthcare plan? What can you expect? After years of hard work, the last thing you want is for your efforts to be undone by unexpected healthcare costs.
Here are some ways to get financially ready.
"Approximately 15% of a retiree's budget goes toward health care expenses," says Sri Reddy, senior vice president of retirement and income solutions at Principal.
"As other expenses, such as transportation and clothing, decrease in retirement, health care becomes a larger portion of your budget while you have less income to live on," he adds.
You have to ask yourself, “what are you insured for while working that will not be insured after you retire? If you’ve had a chance to work with different employers you will probably be exposed to a range of insurance coverage. Some companies provide health coverage services that others do not. From that experience alone, you can most definitely figure out how to plan for your medical costs.
Make those extra coverage expenditures the foundation of your retirement healthcare planning. You can also seek out other cushions such as setting up a healthcare fund, in order to help you save as much money as possible before putting your retirement healthcare plan into action.
According to statistics, one out of every four people over the age of 65 has diabetes, and more than 60% of those over the age of 60 have high blood pressure.
Whatever health issue you're now dealing with, you'll almost probably have to deal with it in retirement. Take this into account while planning your retirement medical expenses. The amount you pay, as well as the services and treatments available to you, will probably change. Allow adequate leeway in your healthcare budget to avoid any disruptions to your regular routine.
You will need to examine different medical plans to see what will give you the most perks while saving you money. Remember to read the fine print especially when it comes to premiums, deductibles, copays, and other fees.
Categorise your drug by expense. If you are currently using specific drugs, make plans to ensure that the supply continues even after you retire.
Knowing who else will be retiring in your family such as your spouse will come in handy, especially when it comes to selecting medical insurance, as mentioned above, and setting aside funds for your healthcare budget.
If you and your partner are both retiring at the same time, make a distinct budget line item for your partner's healthcare retirement expenses, taking into consideration all of their needs and care.
This will assist you in ensuring that you plan appropriately for both of you in order to prevent being caught off guard when one of you needs medical attention.
Most people's eyesight and hearing deteriorate as they get older. According to medical experts, as people age, their bones grow weaker, causing mobility issues. Teeth, like everything else, deteriorate with time. Diseases also become more common as people get older due to reduced immunity.
Medical professionals advise keeping a healthy lifestyle in order to combat this and other issues. It may appear apparent, but it will assist you in staying fit and saving money on unnecessary medical expenditures.
According to a recent poll conducted by United Income, an online investment management, and financial planning firm, today's seniors are healthier, wealthier, and live longer than previous generations. This is because they are more concerned with the quality of their lives than they are with simply surviving.
You can become a member of this group by eating healthily, exercising regularly, getting enough sleep, and avoiding stress. Not only will you save money on healthcare, but you'll also feel better and have more fun in your golden years.
In addition to having a sound insurance plan and a sensible financial strategy in place, there are a few techniques to improve your retirement income. Even if your healthcare savings plan includes a substantial cushion, it is critical to have a source of guaranteed income that is separate from your social security or a pension plan.
According to financial counsellor Randy Groff, it's also critical to have investments that aren't wholly dependent on market ups and downs during your retirement years.
Create a healthcare retirement budget that considers the effects of ageing on one's health. While you should take good care of your dental and eyesight health as you get older, you should also budget for dentist visits and optical treatments in case your vision deteriorates.
There are additional secondary issues associated with the costs of retirement health care. For example, due to mobility and driving concerns, most elderly people find it difficult to drive (if they own a car) or walk long distances. It is important to plan for the means of transportation you will be utilising.
Budgeting for healthcare in retirement is important but even more important is how you budget for it.
"It is vital to consider the type of care you are receiving, as well as the state you are in and the services they give. You may ignore additional costs but they could turn out to be the expensive stuff that you don't think about." Reddy notes.
Keep your daily routine in mind when making your health care budget. Can you utilise public transportation to get to your doctor's appointment? Do you have a family member or a relative nearby who can take you? Can you afford to use a taxi?
Healthcare costs vary so widely, therefore determining how much money to set aside for medical expenses is personal. You can consult a financial expert or your caregiver for personalised cost estimates as a starting point for your savings and budgeting plan.
Healthcare costs could be extremely expensive. It's vital to be prepared for those costs when they arise. You'll be better able to deal with future medical care if you construct a solid savings plan and an adequate budget, in addition to your retirement income plan.
Healthcare prices in Kenya and globally have been steadily growing for decades and do not appear to be slowing down anytime soon. You should be prepared to prioritise your health in order to achieve your dreams and retirement goals, and proper healthcare planning can assist you in doing so.
Statistical data shows that at retirement age, 60% of your medical costs could be incurred. So medical bills will make for a big amount of your retirement budget, and you'll want to be well prepared for that.
Increasing health-care costs are unavoidable. Make a budget just for them. If you wish to retire early (before the age of 60), make sure you understand how much it will cost to maintain your health and decrease the load on your family.
To a well-prepared and healthy you!