People save for a variety of things in retirement. Some dream of vacation homes in tropical destinations, others plan to spend time with grandchildren and family. Of all the activities you are saving for in retirement, did you know that healthcare may have the biggest price tag? One study found that a man would need to save $124,000 and a woman would need to save $140,000 for health care in retirement if they want a 90% chance of being able to pay all their future medical bills.1
Tip: Healthy Targets. Generally speaking, cholesterol should be 200mg/dL or lower. And a good blood pressure level is 120/80 mmHg or less.
Thankfully, your retirement health costs are not set in stone. Of course, you won’t have total control over your health in retirement, but there are things you can do to manage your health risks and potential costs. Here are a few tips.
Get informed — Medical expertise and advice are constantly changing. Keep yourself up-to-date on healthcare news, particularly with regard to issues that have affected you or those related to you. Ask your doctor to help you identify areas of particular concern.
Develop (or maintain) a healthy lifestyle — This boils down to simple wisdom: eat healthy, exercise regularly. Limit fats and sugars and increase your intake of whole grains, fruits, and vegetables. If you haven’t already, embark on an exercise program you can stick with long term. If it’s been a while since you last exercised, consult with your doctor before you begin. Start slowly and work up to your goals.
Relax — Stress can be detrimental to your health. Maintaining friendships, focusing on hobbies, and taking time to relax may help ensure good mental health. In fact, research shows that staying socially active in retirement can alleviate stress and reduce the risk of depression. It may also aid in the prevention of Alzheimer’s disease.
Also, individuals can do a partial 1035 exchange for a portion of the total contract. A tax professional should be consulted for a partial exchange because any gain may be subject to ordinary income tax when withdrawn.
Several factors will affect the cost and availability of life insurance, including age, health and the type and amount of insurance purchased. Life insurance policies have expenses, including mortality and other charges. If a policy is surrendered prematurely, the policyholder also may pay surrender charges and have income tax implications. You should consider determining whether you are insurable before implementing a strategy involving life insurance. Any guarantees associated with a policy are dependent on the ability of the issuing insurance company to continue making claim payments.
Annuities have contract limitations, fees, and charges, including account and administrative fees, underlying investment management fees, mortality and expense fees, and charges for optional benefits. Most annuities have surrender fees that are usually highest if you take out the money in the initial years of the annuity contact.
Fast Fact: Surrender Charge Caution. If you own an annuity contract that is still in the surrender charge period, you may be required to pay the surrender charge when undertaking a 1035 exchange. And your new annuity contract may be subject to its own surrender charge period—which may be longer than the remaining period on the old contract.
Source: Securities and Exchange Commission, 2016
There is no way to guarantee you won’t have unexpected healthcare costs in retirement. But maintaining a healthy lifestyle can help you reduce possible health-related expenses—not to mention avoid spending precious time in the recovery room.
Watch Out, Florida
Bankrate recently ranked the 10 best states to retire, considering several key factors that are important to retirees, such as cost of living, access to medical care, climate and crime rates. The results may surprise you.
- South Dakota
Source: Bankrate, 2015
1. Employee Benefit Research Institute, 2015
The content is developed from sources believed to be providing accurate information. The information in this material is not intended as tax or legal advice. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. This material was developed and produced by FMG Suite to provide information on a topic that may be of interest. FMG Suite is not affiliated with the named broker-dealer, state- or SEC-registered investment advisory firm. The opinions expressed and material provided are for general information, and should not be considered a solicitation for the purchase or sale of any security. Copyright 2017 FMG Suite.