This was a question in a survey which attracted 3,397 responses to 42 questions about retirement savings, income and attitudes.
This report was for a major financial services company and entitled ‘Financial discomfort in retirement report’. (YourLifeChoices, February 2019)
A response that resonated most with me was ‘Peace of mind is extremely important to older people. Having money at hand to be able to pay for your health needs is not only important, it is a must for a peaceful life”
(Retired female, aged 80 years)
The real Big reason for ‘wellness’ for my cohort is
ASFA Retirement Standard (continued) September quarter 2019
COUPLE for retirees aged 65 to age 85
Expenditure items Comfortable lifestyle Modest lifestyle
Health insurance $83.63 $31.96
Chemist $46.04 $23.02
Co-payment and out of pocket $55.01 $40.68
Vitamins and other OTC medicines $5.72 $0.00
Total health services $190.41p.w. $95.67 p.w.
In retirement, an Australian couple needs from $4,975 to $9,901 a year to pay for health care, according to the Association of Superannuation Funds of Australia,
It is significantly dearer for those over age 85.
IE. from $6,227 to $11,672 per year.
A single person between age 65 and age 85 needs 2,578p.a. on the above health expenditure for a modest lifestyle and $6,288
p.a. for a comfortable lifestyle.
This high and ever-increasing cost of health care, combined with longer life spans, has elevated the need to plan for paying for doctor visits, prescriptions and other medical costs in retirement.
At today’s interest rate of, if you are very lucky, 2% then $4,975p.a. requires $248,750 in capital.
So $9,901p.a. requires a lotto price in capital.
I would much rather spend that money on the grandchildren or an overseas holiday or a donation.
In my humble opinion I.M.H.O. wellness is all about self respect & self reliance & then that brings more happiness for longer.
The numbers alone make sense for Prevention which was the title of the very first magazine I read when teaching maths 40 years.
Spending all your super on your health needs over the many years of retirement just doesn't make sense to me.
As compound interest, demonstrates the earlier we start the decision on wellness the better off we are over time.
Act in the best interests of your clients in seeking to extend and secure their financial (and) wellbeing. (AFA, code of conduct)
or of course help with your financial retirement solutions.
Authorised Representative No.238629 of The Financial Link Group Pty Ltd