The Four Boomer "Health Styles" and Health Planning in Retirement
A study in the different approaches to preparing for health care expenses in retirement
Provided by Beneficent Financial - Home of The Safe Money Lady
This study uncovered four Boomer Health Styles and revealed how these different types of boomers approach their health, health care, and preparation for health care expenses in retirement:
Healthy and Proactive (29%), Lucky but Lax (10%), Course-Correcting and Motivated (29%), and Challenged and Concerned (32%).
The Healthy and Proactive take charge of their health and health finances. They are the most actively engaged in healthy behaviors such as exercise and eating well, have the most positive attitude about their health, and also feel well prepared for health care costs in retirement.
The Lucky but Lax have been fortunate to be relatively healthy so far, but show little interest and effort in taking care of themselves or planning for their health finances, leaving them potentially vulnerable to future unexpected health disruptions.
The Course-Correcting and Motivated have experienced a health “wake-up call,” such as an illness or diagnosis, and are now trying to improve their health by seeking out information and tools as well as adopting healthier behaviors.
The Challenged and Concerned are struggling with health challenges, yet many are not actively taking good care of their health. They are the most worried about the impact of illness on their finances, and are the most likely to say health care costs and insurance information are overwhelming and confusing.
Regardless of which category you currently find yourself in, there are opportunities for awareness and improvement in your planning process.
Why does it matter?
Health challenges can be a double threat to retirement financial security. First, health care expenses can be unpredictable and costly, therefore draining retirement savings. Second, unexpected early retirement due to health problems can reduce earning years and retirement savings potential.
Any holistic financial planning for retirement should include anticipating and preparing for health care costs. However, less than one out of six pre-retirees (15%) has ever attempted to estimate how much money they might need for health care and long-term care in retirement. Lack of clear information remains a significant barrier to planning for retirement health care costs. Many pre-retirees say the information available to them when they are trying to determine how much they might need to cover health care costs in retirement – and how they can best prepare for and insure against these costs – is overwhelming, confusing, and frustrating (FIG 11). A mere 7% of people age 55–64 say they feel very knowledgeable about Medicare coverage options. Even among actual Medicare recipients, only about one in five (19%) say they are very knowledgeable about Medicare offerings.
How can you become more proactive?
• Invest in your health by maintaining healthy lifestyle habits and strong social connections. Even when started later in life, healthy habits can significantly improve well-being and vitality during your retirement years.
• Take steps to be financially prepared for health care expenses in retirement:
- Estimate and prepare for out-of-pocket health care expenses such as insurance co-pays and Medicare premiums.
- Educate yourself about Medicare, including new preventative care and recent eligibility changes for therapy and home care.
- Plan for the possibility of lost income should an unexpected illness force you to retire earlier than you expected.
- Discuss critical retirement health and health care topics and decisions with your spouse, along with other family members and trusted advisors.
- Create contingency plans for unexpected health problems and health care expenses, for yourself, your spouse, and even other family members.
- Prepare for long-term care by researching long-term care options you would most prefer and planning for their costs.
This material was prepared by the FPA, and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note - investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.
Citations:
1 - ML.com
2 - AgeWave.com
