Should you be planning your health in retirement?

Regular readers of this blog will know how much I value new research from the USA into my chosen field of retirement income planning. So, it will come as no surprise that I was watching a webinar on Thursday at 2pm Eastern Standard Time (7pm in the UK!) from one of the US thought leaders on our subject – Dan Veto.

Dan’s talk was important but not very cheery. Suffice to say that the Wise family didn’t gather eagerly around the computer to listen in!

Dan was talking about health risk in retirement – a subject that might appear more important in the USA than the UK, as they don’t have an NHS. But the principles that apply in the USA also apply here. The research tells us that health is much more closely linked to a satisfying retirement than wealth.

However, very few plan their health in retirement in the way that they plan their wealth. Health is generally determined by a number of key factors:

  • Our genes
  • Our gender
  • Our environment
  • Access to healthcare (increasingly linked to wealth levels in the UK)
  • Lifestyle (correlated with education levels)
  • Relationships (people in long-term relationships have better long-term health, on average).

We all know that failing to plan is like planning to fail and that’s just what most of us do. Instead of planning for the inevitable decline, we wait for it to happen, then make decisions in a crisis – and we all know that rushed decisions often lead to poor outcomes.

So, what can we do about it?

Our health in retirement is reasonably predictable. We can’t predict when things will happen, but we can predict that there will be a gradual decline. Sorry to be the bearer of bad news – the academic literature shows how the likelihood of suffering a chronic disease increases sharply as we enter retirement. And (sorry again), most retirees die of heart disease, cancer or stroke – conditions that don’t kill us quickly nowadays.

Dan suggests that, if we do assume that we will live in good health and drop dead suddenly and unexpectedly, we are being pretty irresponsible, and placing burdens on those around us unnecessarily. Somebody else will need to drop everything and look after us when we could simply have planned for a predictable decline in the state of our health.

The good news (there was some!) is that we can have some influence over our own health in retirement and we can improve our position by planning. As well as the obvious things – like keeping ourselves fit physically, mentally and emotionally – we can put plans in place so that we can deal with our health needs as our dependence on others increases.

Dan suggests that most of us will move from full health into the “adapting zone”, where we adapt our lifestyles to a reduced standard of health through to the “support zone”, where we need greater support for our lifestyle, before we move to the “dependence zone”. Our failure to plan for the adapting zone and the support zone is often what moves us more quickly into the dependence zone. By thinking and planning ahead, we can actually improve the extent to which we enjoy our retirement.

The message from Dan is that, by just thinking ahead, we can make a big difference to the quality of our lives in retirement. But Louise says I should stop watching webinars and get out more!

Philip Wise | philip@sussexretirement.co.uk

Managing Director and Chartered Financial Planner

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