As you plan for retirement, it's important to consider both your finances and your health; doing so will help protect your nest egg—and your well-being.
This article is brought to you by RBC Echelon, a suite of private wealth management services for ultra-high-net-worth clients, and PinnacleCare, a personal health care advisory firm.
Your financial future depends not only on your ability to create and preserve wealth, but also on your health. And your wealth and your health are closely linked: when you’re in good health, it’s much easier to build wealth, but if you have health problems, you’re probably looking at high health care costs and difficulty building and preserving your nest egg.
While people with lower incomes are more likely to report that they are in poor health, according to The Health Foundation, a high income does not guarantee positive health outcomes. It’s important to practice healthy habits at any age, but managing your health as you near retirement is especially critical; doing so can help protect your retirement savings from high costs of care and set you up for a long and satisfying next chapter of your life.
“Much like financial planning, you have to look at health as an ongoing process,” says Dr. Miles Varn, CEO of health care advisory firm PinnacleCare. “Your plans and strategies for both health and financial planning are very different at different ages.” For example, when you’re young, your health care is focused on prevention and your wealth planning is focused on saving for later. As you age, the risks change and your plans must change accordingly.
“A lot of people don’t stop to think, ‘How should I approach my health now that I’ve gone from one life stage to another?'” Dr. Varn says. “Many people have financial advisors, but most don’t have health advisors. But what good is your wealth if you don’t have your health?”
Everyone’s situation is different, but taking steps to invest in your health today can pay off later and increase your odds of staying healthy longer. Dr. Varn recommends adopting the habits of people who “age well” to protect both your health and your wealth as you approach retirement.
Finding options for physical activity, in any form that’s appropriate for you, can provide numerous benefits, such as supporting your heart and your blood pressure. Dr. Varn recommends trying different types of activities (such as walking, running, biking, swimming, yoga, gardening or strength training), until you find one that you enjoy doing on a regular basis.
Aim to eat a diet that includes more plant-based foods and less processed foods to get plenty of fiber, vitamins and minerals, while avoiding excess cholesterol and saturated fat.
Dr. Varn recommends a Mediterranean diet (if you’re able to accommodate it and it interests you), which is based on the traditional cuisines of the countries bordering the Mediterranean Sea. It focuses on plants and healthy fats, while limiting the consumption of red meat. For example, eating lots of fruits, vegetables, bread, potatoes, beans, nuts and seeds is encouraged, but only moderate amounts of dairy products, eggs and fish are recommended.
However, everyone has different food and nutrient needs, as well as allergies, likes and dislikes, so talk to your physician before embarking on a new food routine.
Your physician can help you determine the appropriate screenings you need based on your age and medical history. A health advisor can help you organize appointments and connect you to appropriate doctors and specialists, as well as arrange genetic testing to help you understand your risk factors and stay up to date with necessary screenings.
Isolation and feelings of loneliness can have a negative impact on your physical and mental health. Ensuring you have a community of friends and family as you near retirement can give you a sense of belonging and help stave off loneliness.
If you need to build social connections, Dr. Varn recommends joining groups that focus on your interests, such as reading or playing cards or chess.
Not only is it enjoyable to connect with others socially, but “engaging in intelligent conversation stimulates your brain,” Dr. Varn says. “When people become isolated, they start declining.”
“Retire from work, but don’t retire from life,” Dr. Varn says. He recommends finding something to keep you fulfilled in retirement, whether it’s volunteering, working part-time, getting involved in a church or community group, or spending time with family and friends.
High levels of stress can be detrimental to your health. If you’re feeling anxious and overwhelmed, avoid overcommitting yourself and learn to say “no” to additional tasks. It can also be a good idea to build stress-management activities into your daily schedule, such as yoga, meditation, listening to music, reading or talking with a friend.
Beyond building those healthy habits into your daily life as you age, it’s also essential to take financial steps to plan for potential health care costs. Indeed, a report from RBC Wealth Management found the projected lifetime cost of care for a healthy 65-year-old is $404,253—and that doesn’t factor in long-term care costs, which could be as high as $100,000 a year.
“That’s why, when we create wealth plans with clients, we include health care as an important part of that plan,” says Dean Deutz, a private wealth consultant at RBC Wealth Management–U.S. “Everyone needs a quality financial plan that will cover how they’ll pay for health care throughout retirement, and they also need a plan for in-home care or long-term care.”
Planning for health care costs during retirement should include how you’ll cover health insurance until you reach Medicare age, as well as how you’ll cover supplemental care and potential elective care after reaching Medicare age, Deutz says. Planning for long-term care could include long-term insurance or self-funding long-term care.
“If you’re not buying insurance, you need to have a plan for who will take care of you,” Deutz says. “Too many people say they’ll self-insure, but they don’t have a plan for who will help them and what resources or accounts they’ll use.”
It’s important to be prepared for the unexpected, and combining that financial preparedness with healthy living is the best approach you can take to be ready to age well in retirement.
RBC Wealth Management, a division of RBC Capital Markets, LLC, Member NYSE/FINRA/SIPC.
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