Two Keys to a Happy Retirement: Health and Wealth Plans

An older couple smile at each other as they enjoy coffee on their porch.

(Image credit: Getty Images)

published 30 December 2023

My mom and stepdad worked hard over their lifetime to accumulate enough assets for a comfortable retirement. They wanted to go anywhere and do anything, whenever and wherever they wanted.

Flash-forward to today, and a significant amount of their time and money in retirement is being spent on their health care needs. While they both had some pre-existing conditions, many of their current health problems can be traced back to a lack of movement in their 60s and 70s. Their lack of strength and stamina, combined with a sedentary lifestyle, eventually led to a serious health condition for my stepdad, forcing an early retirement and the unexpected sale of his business. Significant life changes like these are often financially devastating. Fortunately, their finances were stable enough to cope with those surprises, but their current state of health continues to prevent them from enjoying the retirement of their dreams.

On the other hand, my dad and stepmom are physically healthy and mentally sharp as a tack. By choice, they are still working into their mid-70s with retirement on the near horizon. While they have the means to retire, continuing to work has only enhanced their financial position as well as their mental and physical health. Staying holistically healthy has allowed them to do the things they enjoy most, traveling and spending as much time as possible with their grandchildren.

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According to the Administration for Community Living, 70% of retirees will need long-term care at some point, which can be incredibly expensive. A Genworth study shows that the average semi-private nursing home room today costs $8,390 per month, and in-home aid costs $5,462 per month. In 20 years, those same monthly costs will increase to about $23,133 for a semi-private nursing home room and $15,059 for in-home health care (assuming a 5% medical inflation growth rate).

But health issues can cost more than just dollars. Most of my mom and stepdad’s time is spent visiting the doctor’s office and preparing for or recovering from procedures, which robs them of the chance to enjoy quality time with friends, family and, most important, their grandchildren. It’s even impacted their own relationship, as my mom has become a full-time caretaker rather than just a loving wife.

Build a wealth plan. This is essential for financial success in retirement. A wealth plan goes beyond simply saving money in a 401(k) or Roth IRA. It addresses everything from tax strategy and Social Security optimization to investment strategy and income planning. Your plan should focus on protecting your assets as you approach retirement and offer safeguards like stress tests and distribution strategies to ensure you have the financial means to support retirement, no matter how long you live.

Plan to live a long life. Your customized wealth plan should be designed to sustain your lifestyle, even if you were to live well into your 90s. If you end up living a shorter life, your loved ones can benefit from the wealth you created but didn’t use. On the other hand, if you have enough retirement income to last only until age 75 and you end up living two more decades, you’ll experience years of financial hardship, and your loved ones will likely have to shoulder the responsibility of taking care of you. Planning for retirement with longevity in mind helps ensure your needs will always be met.

While some people might be predisposed to certain complications, research shows that your lifestyle can help activate or avoid those health complications. Pay close attention to your nutrition and stay physically active, even as you age. Simple, daily movement can be life-changing: Walking just 6,000 steps a day has been proven to dramatically decrease your risk of cardiovascular disease, according to a study published in the journal Circulation. Habits like self-reflection and practicing gratitude can help reduce your toxic stress load, according to the CDC and Tamen Jadad-Garcia and Dr. Alex Jadad, authors of Healthy No Matter What: How Humans Are Hardwired to Adapt. If left unchecked, toxic stress can cause serious damage to your physical and mental health.

Consider long-term care insurance. Even if you take good care of your mental and physical health, it’s important to plan ahead for any potential medical needs. Paying for health care out-of-pocket in retirement can be expensive, and Medicare will not cover all of your needs. A traditional or hybrid long-term care insurance policy can help supplement your regular insurance or Medicare coverage, protecting your retirement assets from the hundreds of thousands of dollars a long-term care claim can cost.

Create structure in retirement. Transitioning into retirement can be difficult. Your daily work schedule is gone, and it can be challenging to find a new sense of purpose. Not to mention, it can be hard to maintain social connection, and loneliness has been found to increase your risk of heart problems, dementia, stroke, depression and anxiety, according to the U.S. Surgeon General’s Advisory on the Healing Effects of Social Connection and Community.

When your career ends, it’s up to you to maintain structure and purpose in your life. Find a new passion project, like woodworking, crafting or hiking. Get connected with a community group such as a book club, sewing circle or religious group. Consider volunteering at a local nonprofit. I once worked with a retiree whose child owned a nonprofit, so they joined the board of directors as a way to stay connected to family and make an impact on the community.

A truly holistic financial plan should address the entirety of your health — financially, physically, mentally and relationally. Longevity shouldn’t turn into a financial burden, but rather something to be celebrated knowing you worked hard to create a retirement filled with healthy habits and the means to support it. The success of your retirement depends on finding a balance between health and wealth so you can live out the life you’ve earned!

Disclaimer

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Bradley Rosen is the owner and president of Longevity Financial, an independent financial professional with over 24 years of financial planning experience. Bradley provides each client with a customized Design for Life By Longevity FinancialⓇ plan that encompasses each part of their financial picture, including investments, insurance, taxes and legacy planning. He is passionate about creating longevity with one’s finances and prioritizing holistic health, both physically and financially. His unique approach to retirement planning is the result of watching both his grandmothers outlive their retirement income. For his dedication to educating and empowering women, he was awarded the Thelma Gibson Award in 2015. He has been featured in Forbes and on the local CBS, NBC and FOX TV news affiliates in his new hometown of Atlanta.