In order to live a long and healthy life well into retirement, we all know we need to have a balance between work and play. We know we must include all the elements that create a positive lifestyle, both financially and health-wise. Apart from investing and saving for our future, we should also plan (and save) for that inevitability of aging and physical decline, and what that could mean for us where it concerns our health as we age – and the costs associated with it.
Having enough funds set aside to provide for the possibility of our needing long-term healthcare should be a fundamental concern. After all, it is a fact that the Baby Boomer generation are living longer lives.
A complete retirement plan involves considering what might happen down the road in order to be ready to face any challenges.
How Healthy Will You Be, Come Retirement?
Who knows? One of the most difficult things to predict is how healthy you will be in your retirement. As we age, our ‘functional capacity’ (basic activities of daily living including walking, performing personal hygiene, eating and dressing) or our ability to perform ‘Instrumental activities’, (daily living that includes shopping, housekeeping and food preparation) declines. In some people, the extent is so drastic that healthcare intervention is necessary. And this is where pre-planning how to finance these additional lifestyle and healthcare costs comes in.
Take the time now to talk to your financial advisor about your current health conditions and lifestyle practices. Together, the two of you can estimate your potential health-related costs and start to make arrangements to help cover them, just in case.
Two Tips to Help You Plan for Costs
You want to ensure that you will have the financial flexibility to get the care you need down the road when and if you need it. The following two tips, if acted on before the need arises, could mean you have a solid long-term healthcare plan in place.
Option 1 – Set Aside a Portion of Your Nest Egg
Earmark these funds specifically for healthcare expenses. This money should be accessible on short notice. Ensure this capital is not used for any other purpose. If, in the end, there are funds left over after you pass away, you can bequeath them to your loved ones. You can set it up such that the excess funds are invested for their future healthcare needs. In other words, create a legacy.
Option 2 – Invest in Long-Term Care Insurance
This kind of insurance can help you to pay for extended care not covered by government health plans. This could cover such assistance as accommodation in a long-term care facility or in-home services; private nursing care, physiotherapy or meal deliveries, to name but a few. These kinds of plans vary, so we advise you to work with your financial advisor to choose the options that are right for you and your family.
Be Prepared
Just like the Boy Scouts’ motto says, you should ‘be prepared’. This is an important strategy everyone ought to adopt. It’s a fact that health-related costs may possibly end up being one of your retirement’s biggest budget expenses.
You need a strategy going forward, and our team can provide you with valuable information and strategies in order to help you plan and save for your future’s potential long-term health care needs.