The Secret to Getting Through a Health Scare Before (and After) Retirement

4 The Secret to Getting Through a Health Scare Before Header Image  If you’re approaching retirement, you might already know someone who was either “helped” into retirement due to a health issue, or who experienced one shortly after retiring. Unfortunately, as we get older, problems like cancer, chronic illness, and heart disease tend to become more common.

So what can you do? Here are a few steps you can take to help weather the blow, whether you’ve already retired or are still a few years away.

Thinking through early retirement

Ideally, your retirement plan will have a contingency for an early retirement. Unfortunately, the need to retire before one’s time is quite common, so it can only help you to have an idea of what you would do should the need arise.

Depending on your personal situation, consider what would happen if you retired 3 years earlier than you expect. What about 5 years? Seven years?

If you’d be okay in all of those scenarios, that’s great. But for most people, this type of change in plans will have a serious impact on financial stability: after all, it’s a few extra years of drawing down income and a few less years of saving.

Get creative and consider what you would be able to do to help soften the blow. Maybe that includes downsizing your home or lifestyle, or maybe it entails a change to your insurance policies or investment strategy. If you are willing to implement certain conservative planning strategies well before retirement, all the better – it could mean more flexibility to adapt to a health scare, regardless of when it occurs.

Special savings for emergencies

One feature that all health scares tend to share are their costs: for many people, the additional co-pays, out-of-pocket expenses, and prescriptions can be hard to bear. Add in the possibility of even greater needs, like a home health aide or a stint in a nursing home, and even a well-prepared retiree can get nervous.


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What can you do? One method is to have a portion of your retirement savings earmarked for emergency health expenses like these. This is money that you weren’t planning on using for income at all – rather, it’s money you plan to let grow indefinitely until you really need it.

The amount (and frankly, the feasibility of doing this at all) will very much depend on your personal situation, your total asset base, and your actual health needs. Those who already have health problems or chronic disease may do well to plan more conservatively; those who have a large asset base and who are in great health may be able to set aside less.

Don’t forget about the long run

All of your estimates and plans might well be perfect – today. But even those plans will lose their ability to meet your needs over time. Healthcare cost inflation has outpaced overall inflation for years, and it’s not expected to stop.

In 2017, healthcare costs are expected to rise 6% — and that reflects a 10-year low! PwC, a consulting firm, expects costs to tick up again in 2018, with growth of 6.5%.4 The Secret to Getting Through a Health Scare Before Info Image

This makes it critical to revisit your plans every year or so to help make sure that your emergency savings and your contingency plans are still likely to meet your needs over the long run.

Also keep in mind that as you get older, the costs of an emergency could very well rise.

Many of us have seen this before with our own loved ones, where a seemingly minor problem turns into a serious medical emergency. Where a simple fall for a toddler is a routine part of the day and a minor inconvenience, for a senior it can be a serious medical issue.

According to the National Council on Aging, for older people falls are the leading cause of fractures, hospital trauma admissions, deaths from injury, and adult traumatic brain injuries.

The key is flexibility

One thing that appropriate financial planning can give you is the flexibility to adapt to new situations and challenges.

This is really a special benefit of having savings and resources: if you can focus on your convalescence rather than on the cost of care, you’re already working with a little less stress and a little more power.

Earmarked savings, contingency plans, and stress testing can all help you get there. So can a focus on a sustainable income in retirement and an understanding that your needs and the costs of those needs are likely to change over time.

Plan early and plan often, and you’ll likely have a much better chance of getting through a health scare with your sanity – and your finances – intact.

Health is just one part of the puzzle

If you’re getting ready to transition into retirement, it’s important to cover all your bases. Before you hand in your notice, download our free guide to transitioning into retirement. Your Retirement Transition Plan covers all the major points you need to address before you take the leap, from health to housing, insurance to investment.

Download Your Retirement Transition Plan free today!


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We can discuss this topic and more at a complimentary appointment. As a bay area retirement planning coaches, we can give you a review and make suggestions based on your retirement objectives.

Important Disclosures

Material provided by Augury Consulting. Augury Consulting is not affiliated with Vitucci & Associates Insurance Services or United Planners Financial Services (United Planners). The opinions voiced in this article are for general information only. They are not intended to provide specific advice or recommendations for any individual and do not constitute an endorsement by United Planners.

To determine which investments may be appropriate for you, consult with your financial professional. Please remember that investment decisions should be based on an individual’s goals, time horizon, and tolerance for risk. Neither diversification nor asset allocation can ensure a profit or prevention of loss in times of declining values. United Planners does not render tax advice.

Securities and advisory services offered through United Planners Financial Services, member FINRA, SIPC. Pasquale Vitucci, CA Insurance Lic. # 0758212, is an Endorsed Agent of Vitucci & Associates Insurance Services CA Insurance Lic. # 0I06319. Vitucci & Associates Insurance Services and United Planners are separate and unrelated companies.
This page contains links to third-party company websites. By selecting a link, you will be leaving our website and launching a new browser window. These links are provided for informational purposes only and should not be viewed as an endorsement, sponsorship, solicitation or other affiliation with respect to any third parties. We are not making any recommendations or providing any advice on securities in particular or investments in general. Neither Vitucci & Associates nor United Planners Financial Services have reviewed the content of, and are not responsible for, the information or the results of the third-party websites.

Further Reading

Healthcare cost inflation:

  • The Secret to Multi-Generational Financial Planning
    If you’re thinking past your own retirement to your parents, your children, and your grandchildren, you’re probably a little overwhelmed. How can you ensure that everyone’s interests, needs, and better selves are protected for the long run? The secret: Get advice – as a family. This might seem like the purview of the ultra-wealthy, but it doesn’t have to be. Planning for multiple generations just means prioritizing and organizing for the whole brood, and the benefits can be enjoyed by families of any size and means. Here’s how to get started.
  • 5 Insurance Products for Every Generation
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    When you see that your children need help, it can be hard not to step in. Whether it’s with time, advice, or even money, many of us parents have a lifelong urge to do what we can. But if you’re in retirement or close to it, you might want to think twice about offering financial help. After all, these could be some of the most fragile years for your long-term financial security. That’s because of “sequence of returns” risk. In a nutshell, sequence of returns risk describes the reality that there are long-term effects to short-term investment performance. Namely, a bear market early in retirement can have a lasting impact on your savings as a whole. We’d argue that the same risk holds true for large expenses early in retirement. Giving too much too fast – especially when it feels like you’re sitting on a significant pot of money – could put you at risk if your expenses ever have to go up. But that doesn’t mean you can’t help your children – it doesn’t even mean you can’t give money. But it can pay to be strategic about it. Here are a few alternative options for helping out without cashing out.