Though you'd think retirement would be a period of life to look forward to, for many workers, it's nothing more than a nagging source of stress. And much of that stress boils down a money, or a lack thereof.
It's not a secret that countless Americans are dangerously behind on retirement savings -- so much so that 60% are more worried about running out of cash during their golden years than they are about dying. But even those who are saving responsibly are concerned that they won't manage to keep up with their future expenses.
Of course, there's no magic formula for guaranteeing a financially secure retirement. (If there were, people like me would have a lot less to write about). But the one thing you can do to improve your personal outlook in retirement is to take control of your health, both from a physical and financial perspective.
Know what costs to anticipate
Healthcare costs are the greatest variable you're likely to face as a senior, so if you read up on them during your working years, you'll be better positioned to save appropriately. According to recent projections, the average 65-year-old couple today will spend $400,000 (possibly more) on healthcare throughout retirement. Reading between the lines, if you're not particularly healthy, or have a known medical condition that's likely to worsen with time, then you'll need to pad that figure. Furthermore, that $400,000 estimate doesn't account for long-term care expenditures, which we'll get to in a minute.
None of this is meant to scare you into thinking you won't be able to afford healthcare as a senior. Rather, it's supposed to serve as a wake-up call for those of you who were previously in the dark -- because now that you know how much healthcare is likely to cost you, you can make adjustments to your financial plan and incorporate what may be a more realistic figure than the one you were previously working with.
Prevent health issues from getting worse
Whether you're nearing the tail end of your working years or are already retired, taking proper care of your health could prevent a fair amount of financial upheaval later on. That's because it's typically cheaper to address minor medical issues than ones that escalate into major problems.
Here's just one example. Say you ignore an infection because you're busy or don't want to pay for a doctor visit that would normally come with a $30 copay. If that infection worsens and spreads, and you wind up being admitted to the hospital, you might pay thousands of dollars after all is said and done.
Now this may be a somewhat extreme scenario, but it's meant to illustrate the importance of prioritizing your health at all times. If you're working and have health insurance, see your providers as necessary, and follow up as directed. If you're enrolled in Medicare, take advantage of the program's preventive services, many of which are free. Otherwise, you risk compromising your finances along with your health.
Invest in long-term care insurance
Now let's talk about long-term care insurance. Is it expensive? Somewhat. The average 60-year-old couple, for example, pays $3,400 per year in premiums. But is it worth it? Absolutely.
An estimated 70% of seniors will wind up needing some type of long-term care in the future, and without a policy to help pick up the tab, those costs could quickly go from daunting to astronomical.
Case in point: It costs over $43,000 per year to reside in an assisted-living facility, and over $82,000 per year to live in a nursing home with a roommate (or $92,000 if you want to bunk alone). While padding your retirement savings can help absorb these expenses, you should strongly consider putting some of that money into an insurance policy to defray your costs down the line.
Keep in mind that the sooner you apply for long-term care insurance, the more likely you are to not only get approved, but snag a discount based on the state of your health. (In this regard, long-term care insurance is similar to life insurance -- the healthier you are, the less you pay.) So if you're really intent on buying yourself some financial peace of mind as you near or navigate retirement, be sure to get moving on this worthwhile investment.
Attaining financial security in retirement starts with a focus on your health. You can always downsize in retirement if your home starts costing too much, or scrap travel plans if your savings can't support them. But medical care is one thing you can't afford to compromise on, and if you work it into your financial plan, you'll have fewer worries at a time when you deserve to be enjoying your life, and not stressing over it.