The Health-Wealth
Connection
Explore why your health is an element of your financial journey and how it connects to your goals.
Your Financial Plan Starts with Your Health
When it comes to financial planning, most people think about budgeting, investing, and saving for the future. While these are critical components, one often-overlooked factor can make or break your financial goals: your health. October is Financial Planning Month, and it’s the perfect time to take a closer look at how your physical well-being and financial security are intertwined.
The Link Between Health and Wealth
Your health is more than just a personal asset; it’s a financial one. Medical costs, unexpected health emergencies, and long-term care expenses can quickly derail even the best-laid financial plans. For example:
- Unexpected Medical Expenses: Without proper planning, a sudden illness or injury can lead to debt or force you to dip into savings.
- Longevity and Retirement: Living a long, healthy life is a blessing, but it also means your retirement savings need to last longer.
- Lifestyle Choices and Costs: Preventive care and maintaining a healthy lifestyle can reduce healthcare expenses over time.
Yet, 64% of Americans don’t consider health the most important factor in their retirement planning.1 This startling finding points to a significant mismatch in priorities, especially considering that health and wellness support maintaining mobility, independence, and quality of life throughout retirement. By overlooking this connection, many retirees may face unexpected challenges that could have been mitigated with proper planning.
In fact, Fidelity Investments® recently revealed in its 23rd annual Retiree Health Care Cost Estimate that a 65-year-old retiring this year can expect to spend an average of $165,000 on health care and medical expenses throughout retirement.2 These costs highlight why a comprehensive financial plan must consider your health.
Three Steps to Align Your Health and Wealth
To build a financial plan that supports both your goals and your physical well-being, consider these three key areas:
Prepare for Health-Related Costs
- Health expenses often increase as we age, so it’s important to budget for these in your financial plan.
- Consider health savings accounts (HSAs) or other tax-advantaged tools to prepare for out-of-pocket costs.
- Evaluate your insurance options, including coverage for long-term care, to check if you’re adequately protected.
Wellness as an Investment
- Staying healthy is one of the best investments you can make. Regular exercise, balanced nutrition, and preventive care can not only improve quality of life but may also save you money in medical expenses over time.
- Think of wellness activities as part of your financial strategy. For example, annual check-ups and screenings may seem like minor expenses now, but they may help you avoid costly treatments later.
Plan for Longevity
- Longer life expectancy means your savings may need to work harder. A well-constructed financial plan considers not just your lifespan but also your health span – the years you live in good health.
- Partnering with a financial advisor who understands the impact of health on retirement planning can help you build a more resilient financial strategy.
Take Action for Financial Planning Month
October is the ideal time to revisit your financial plan with a focus on health. Are you prepared for rising medical costs? Do you have the right insurance coverage? Are your wellness habits aligned with your long-term goals?
By addressing these questions now, you can create a roadmap that ensures your health and finances are working together to support a fulfilling and secure future. Financial planning isn’t just about numbers; it’s about living the life you want – healthy, wealthy, and wise.
If you’re ready to take the next step, reach out to a financial advisor who can help you navigate the intersection of health and wealth. Together, you can build a comprehensive plan that prioritizes both your physical and financial well-being.
Sources:
1. https://www.mediadecision.com/lifestyle/health-or-wealth-what-retirees-prioritize-may-surprise-you/article_37512798-739e-11ef-ae23-73044bb13019.html
2. https://newsroom.fidelity.com/pressreleases/fidelity-investments–releases-2024-retiree-health-care-cost-estimate-as-americans-seek-clarity-arou/s/7322cc17-0b90-46c4-ba49-38d6e91c3961
Investment Advisory Services offered through Trek Financial LLC., an (SEC) Registered Investment Advisor.
Information presented is for educational purposes only. It should not be considered specific investment advice, does not take into consideration your specific situation, and does not intend to make an offer or solicitation for the sale or purchase of any securities or investment strategies. Investments involve risk and are not guaranteed, and past performance is no guarantee of future results. For specific tax advice on any strategy, consult with a qualified tax professional before implementing any strategy discussed herein. Trek 24-382
