Life sometimes has something different in mind than what you had planned. While there have been meaningful improvements for how to manage chronic diseases like hypertension, cancer, and diabetes, these conditions can throw a real wrench into well being. Caring for your health is paramount, but illness can also have an impact on your financial well being.
No matter your current health status, one of the most critical aspects of financial planning is safeguarding your well-being in the face of possible chronic diseases. In this article, we will explore what you need to do in your 20s, 30s, 40s, 50s, and 60s to protect your financial health against the threat of chronic illness.
A diagnosis of diabetes or any chronic disease can be life-changing, not only in terms of health but also financially. Managing the financial implications of a chronic illness is a critical aspect of maintaining a good quality of life. This article explores strategies to help individuals and their families protect themselves from the financial burdens associated with diabetes or other chronic conditions.
Chronic Conditions Are Expensive
As if the health implications of having a chronic condition were not enough, there are major emotional and financial considerations as well. In fact, the overall cost of chronic disease in the United States amounts to an average of $37 trillion per year, about 20% of the US gross domestic product. These costs include both direct costs for prescriptions, procedures, and other health care services as well as indirect costs such as loss of employment.
The most prevalent chronic health diseases include diabetes, Alzheimer’s, osteoarthritis, hypertension, cancer, and more can lead to hospitalization, long-term disability, reduced quality of life, and much higher household costs.
Diabetes is particularly costly
According to the Milken Institute, after Alzheimer’s, diabetes is the most expensive chronic condition. On average, people with diagnosed diabetes have medical expenditures approximately 2.3 times higher than what expenditures would be in the absence of diabetes. In 2017, these costs represented $1 out of every $4 spent on healthcare in the United States.
In Your 20s: Building a Strong Financial Foundation
In your 20s, life is often marked by newfound independence and exploration. While health concerns may not be at the forefront of your mind, this is a crucial decade for establishing a solid foundation for your financial and physical well-being.
Here are four things to consider:
Health Insurance: Obtain health insurance coverage, either through your employer, a private plan or through your parents (if that is still an option). Learn about your policy’s terms, including deductibles, and co-pays.
Emergency Fund: Start building an emergency fund to cover unforeseen medical expenses. Having a financial cushion provides peace of mind.
Healthy Lifestyle: Establish healthy habits now. Regular exercise and a balanced diet can lower your risk of chronic diseases in the future.
Learn About Chronic Diseases: Familiarize yourself with common chronic conditions and their risk factors and assess your family history for health factors. Knowledge is a powerful tool for prevention.
Strong Financial Foundation: Learn about personal finance and develop strong financial habits so that you are prepared for whatever life has in store.
- Use the NewRetirement Planner to develop your plan, monitor progress, and stay on track to lifetime financial wellness.
In Your 30s and 40s: Strengthening Your Financial Security
In your 30s and 40s, you may find yourself juggling a career, family, and financial responsibilities. These decades are pivotal times to reinforce your financial security and take steps to mitigate the risks associated with chronic diseases. By focusing on preventive measures and enhancing your financial resilience, you can build a stronger safety net for the future.
Life and Disability Insurance: Consider purchasing life and disability insurance policies to protect your family’s financial future in case of illness or untimely death.
Routine Check-ups: Schedule regular check-ups and screenings. Early detection can prevent minor issues from becoming major health and financial burdens.
Maximize Retirement Contributions: Contribute to retirement accounts like a 401(k) or IRA. Your long-term financial security is closely tied to your retirement savings.
Regular Exercise: Maintain an active lifestyle to reduce the risk of heart disease, diabetes, and other chronic conditions.
Healthy Diet: Continue to prioritize a healthy diet rich in fruits, vegetables, and lean proteins. Minimize processed foods and excessive sugar intake.
Regular Screenings: Follow your healthcare provider’s recommendations for routine screenings like mammograms, colonoscopies, and cholesterol checks.
Financial Planning: Review and update your financial plan. Balance priorities and make informed decisions about your money.
- The NewRetirement Planner can help you make better decisions. Run any “what if” scenario. Find out if you can: afford to help children with college or go on vacation, discover when you can retire securely, and monitor your financial health.
In Your Early 50s: Retirement is Visible on the Horizon
In your 50s, retirement and aging come more clearly into focus. It is time to make sure your financial well-being and health are well-maintained. With retirement on the horizon, you should be mindful of your retirement savings and healthcare coverage, all while continuing to manage chronic disease risk factors through proactive health measures.
Retirement Savings: Increase your retirement savings. Maximize contributions to catch up if necessary.
Health Savings Account (HSA): Consider contributing to an HSA if you have a high-deductible health plan. HSAs offer tax advantages and can be used for qualified medical expenses in retirement.
Chronic Disease Management: If you are diagnosed with a chronic condition, work closely with your healthcare provider to manage it effectively. Early intervention can reduce long-term healthcare costs.
Is Work Stressful? Consider a Sabbatical: At this point, you may not be ready for retirement, but you might need a break. Have you considered a sabbatical? Extended time away from work may renew your spirit and health.
In Your 50s and 60s: Transitioning to Retirement
As you approach the culmination of your working years, meticulous attention should be paid to both your physical and financial well being. It is critical to understand where you stand with regards to health and wealth and the intersection of the two.
It is time to put together a detailed financial plan for your future which includes income planning, Medicare coverage, optimizing Social Security benefits, lifestyle considerations and so much more.
Put Together a Holistic Retirement Plan: Now is the time to make sure all of your “i’s” are dotted and “t’s” are crossed in your retirement plan. You can use the NewRetirement Planner to get clarity on:
- How much you are going to spend on what and when throughout retirement
- Income sources and how savings will be withdrawn, insuring that you can cover both necessary and nice to have expenses
- A clear plan for healthcare and healthcare spending
- Back up plans for worst case scenarios
Medicare: Enroll in Medicare as soon as you’re eligible, typically at age 65. Familiarize yourself with the different parts and coverage options.
Social Security: Decide when to claim Social Security benefits. Delaying can result in higher monthly payments.
Estate Planning: Create or update your estate plan, including a living will, power of attorney, and healthcare proxy. Ensure your financial affairs are in order.
Review Insurance Policies: Reevaluate your life, health, and long-term care insurance coverage to ensure it aligns with your current needs.
Conclusion
Protecting your financial well-being from the possibility of chronic disease is a lifelong journey that requires planning, awareness, and commitment. Regardless of your age, taking proactive steps, such as investing in insurance, prioritizing a healthy lifestyle, and staying informed about healthcare options, can help mitigate the financial challenges that may arise due to chronic illness.
Remember that your financial health is closely intertwined with your physical well-being, so strive for a balanced approach that supports both.
