Including Health in Retirement Planning

While practicing healthy habits throughout life is important, some financial planners are now suggesting that health be a consideration in retirement planning as well.

Generally we tend to look to financial planners for assistance in planning for our future retirement financial needs. Most of us consider this type of planning to involve things like investment choices for 401(k), Individual Retirement Accounts (IRA) and similar investment vehicles geared toward providing a financially secure retirement. Retirement planning also considers things like paying down or, preferably, eliminating, debt prior to retirement and estimating income and expense needs after retirement.

Depending upon the post retirement life style a person desires and their or their planner's estimate of future inflation and investment returns the amount needed for a financially comfortable retirement can vary greatly but is usually rather large in most cases. I recall reading something on Yahoo Finance a while ago where some retirement experts were calling for people to have as much as four million dollars in retirement savings in order to continue to simply live a middle class life style. These higher amounts are generally based upon full retirement at age 65 or sooner and a remaining life expectancy that can be as long as 40 years following retirement. With inflation over three or four decades, four million dollars might not be an over estimation for the average person.

So where does health come in with this? As everyone knows health costs are both high and rising faster than other costs. Added to this is the fact that, as people age, they tend to require more health care. Given this, it is easy to see where much of that four million mentioned above might be needed.

However, health care costs don't have to consume a major portion of a retired person's savings. Granted, some people have more medical problems than others and there are medical problems that are beyond people's control. That being said, many health problems are avoidable. Just look around. The media - television, newspapers, magazines all carry warnings about health problems associated with being over weight, poor diet, lack of exercise, smoking, drinking in excess, etc.

While maintaining a proper diet, giving up smoking, exercising regularly, etc. are not always easy, we do have the choice of following good health habits or not following them. No sane person plans to be ill or chooses to ruin their health. For most people, good habits for health are just inconvenient and they are willing to take a chance that they will either be in the minority who will enjoy good health despite their unhealthy habits or that medical science will be able to come to their rescue. And here is where retirement planning comes in because, while a person can gamble on medical science rescuing them from the effects of their bad habits, it will cost them. And the thought of that cost just might be the the additional motivation to change their habits and save some big bucks in the future.