While I always wanted to be an adult, never have I ever wished to myself to grow old. No one ever wants to grow old. At least, no one that I’ve talked to. The primary reason is that once you reach a certain age, your body starts to wear down and costs to maintain your health go up. This is the reason that I often dread talking to my grandparents. Conversation isn’t about anything other than body ailments. Whether it is someone’s hip that is hurting or movements that they can no longer perform, it never ends.
Don’t get me wrong, I love my grandparents. I just don’t want to grow old. As I think about growing old and planning for retirement, I can’t help but wonder if I am totally prepared for retirement. The number one concern of mines is not having adequate health insurance. With the increasing costs of health insurance, unless things start to turn around, I don’t see a bright future.
Anticipating Medical Costs in Retirement
No one really knows how much it will cost to take care of your health in 10-20 years. Heck, few people even know what it will be the year after next. This uncertainty is a huge challenge that we face as we save for retirement. While I am sure no one ever says that they saved too much for retirement, a lot of people do say they haven’t saved enough.
Daily finance reported that those who reach age 65 will have a 40% chance of moving into a nursing home. I don’t know about you, but I sure don’t plan to spend my elder years in a nursing home, but who does. And yet, this is the future risk that we face. With costs of somewhere between $40,000-$90,000 per year, I can’t imagine how fast this would deplete family’s financial reserves.
Medical costs, whether it is long term care or not, is probably one of the highest costs for retired folks. My aunt and uncle recently retired and reported to me that they were paying $4,000-$5,000 per year for each of them just for high-deductible health insurance. That’s about 5x what I am paying right now.
The truth of the matter is that old age and deteriorating health create a huge impact on your financial status in retirement. While there is social security and other safety nets to protect you (somewhat), it shouldn’t stop you from preparing the best that you can while you can. When I think about retirement and the increasing costs of healthcare, it motivates me to cut my spending and save much more for retirement.