Consider health care costs in retirement planning

Focus on diet, exercise, and budget at all stages of your working life.

In a recent Jamaica Observer report, the Minister of Health and Welfare, Dr Christopher Tufton, reportedly said that stroke is the leading cause of death in Jamaica and accounts for “13.62% of the total number of deaths in the country”.

The majority of stroke victims are over the age of 50 and up to 15% of stroke victims are between the ages of 18 and 50. These statistics should be of real concern to the nation. The working age mainly starts at 18 and if young adults are diagnosed with stroke at this early stage, it can impact their income, work productivity and the economic growth of the country.

Since retirement planning should begin with the first paycheque, young adults should no longer ignore the cost of financing health care, and since the propensity to be diagnosed with an illness increases with age, Health care costs must be taken into account when planning for retirement. . If the trend continues, the country will see more working adults forced into retirement due to the onset of illnesses such as strokes. How well equipped are our working adults to retire early due to health issues? Older people may also be forced to retire earlier than expected. If health conditions worsen during the working years, especially if they are a few years away from retirement, some seniors would like to stay longer in the labor market in order to maximize their savings and investment for the retirement years. .

It is therefore important to focus on diet, exercise and budget at all stages of working life. Health insurance covering non-communicable diseases (NCDs) and life insurance should be included in the financial plan. But more importantly, the importance of saving and investing early must be emphasized. When employees leave their jobs, especially prematurely due to illness or disability, there are often not enough funds saved to continue paying insurance premiums. If premiums are not paid, policies are likely to lapse, worsening the financial situation. Having a diversified financial plan made up of assets that are increasing in value like stocks, bonds and real estate is important. Some people make the mistake of having all their investment funds in insurance-linked policies. This can prove to be a fatal mistake in the event of job loss, resulting in long periods of unemployment, which results in policies being terminated due to non-payment of premiums. Investing for short and long term goals should be a priority when developing a financial plan. Some workers don’t calculate the long-term health care costs of illness and the impact it will have on their retirement lifestyle. The costs of treating these diseases are prohibitive and rehabilitation in hospital is limited and expensive.

Traditionally, workers worry about retirement as they approach their 40s. But it can become awful for workers in their 40s and 50s to spend a large percentage of their income on NCDs that can set in during this phase with little or no savings allocated for retirement. Non-communicable diseases can hamper the growth of pension contributions, but working adults and seniors can boost their incomes by taking advantage of online jobs. Social media has created job creation opportunities.

Diabetes, cancer and stroke are the main NCDs. Research shows that men and women with two or more NCDs are 20% more likely to retire early. Therefore, retirement planning becomes even more important for all employees. Health and financial education should be paired. The impact of health spending on household income and savings can be severe. A report by the Organization for Economic Development and Cooperation and Development (OECD) found that women with diabetes are “12% less likely to be employed than women without diabetes”. In Jamaica, 42% of households are headed by women and women have a longer life expectancy than men. You can therefore understand the dilemma when the woman who heads her household is unable to work due to illness. The prevalence of NCDs, on the other hand, is increasing at a faster rate for Jamaican women than for Jamaican men.

As the population ages, the growth of NCDs will increase rapidly. Financial literacy and a healthy lifestyle are the way to enjoy the retirement years. “Retirement is wonderful if you have two essentials – plenty to live with and plenty to live with” – unknown.

Grace G McLean is a Financial Advisor at BPM Financial Limited. Contact her: gmclean@bpmfinancial. and visit the website: www.bpmfinancial.com. She is also a podcaster for Living Above Self. Email him at [email protected]

Do you consider illness in your retirement plan? You should.