I have written often of the need to look at the cost of health
care in retirement (often citing the Fidelity study that shows the
average 65-year-old couple will need $240,000 in retirement for health
care-not including long-term care). At the end of the day, however, the
cost is the cost. If you need to use a doctor, you will eventually need
to pay the bill. But who said you need to see the doctor?
Somnath Basu, professor of finance at California Lutheran University, recently wrote about the rising costs of health care and a potential cause. He points to research at West Point Academy and the Citadel Military Academy that shows a disturbing trend. In 1920, an 18-year-old American weighed 138 pounds and had a body mass index (BMI) of 19.8 (a BMI of 21.7 is the median value in the range for good to excellent health). In the 1950s, the average BMI shifted slightly, with the average weight jumping to 150 pounds and BMI rising to 22.5. Today, a 50-year-old (who would have been 18 around 1980) has an average weight of 168 pounds and a BMI of 28 (a BMI over 30 is considered obese).
Professor Basu then points to consumption as recorded by the Bureau of Labor Statistics. Without laying out chart after chart, what you will see is that the baby boomers' parents, who are now over age 65 and consuming the most health care, were also some of the fittest people still alive. The baby boomers, whose average BMI is higher than normal, have yet to hit the range of heavy spending for health care.
That last sentence should give you pause; it is apparent that coming generations will spend more on health care in retirement, if not before. Beyond expense, obesity leads to other health problems that can just make living not as pleasant. There are several aspects of retirement that should encourage everyone to work toward a healthier BMI:
Somnath Basu, professor of finance at California Lutheran University, recently wrote about the rising costs of health care and a potential cause. He points to research at West Point Academy and the Citadel Military Academy that shows a disturbing trend. In 1920, an 18-year-old American weighed 138 pounds and had a body mass index (BMI) of 19.8 (a BMI of 21.7 is the median value in the range for good to excellent health). In the 1950s, the average BMI shifted slightly, with the average weight jumping to 150 pounds and BMI rising to 22.5. Today, a 50-year-old (who would have been 18 around 1980) has an average weight of 168 pounds and a BMI of 28 (a BMI over 30 is considered obese).
Professor Basu then points to consumption as recorded by the Bureau of Labor Statistics. Without laying out chart after chart, what you will see is that the baby boomers' parents, who are now over age 65 and consuming the most health care, were also some of the fittest people still alive. The baby boomers, whose average BMI is higher than normal, have yet to hit the range of heavy spending for health care.
That last sentence should give you pause; it is apparent that coming generations will spend more on health care in retirement, if not before. Beyond expense, obesity leads to other health problems that can just make living not as pleasant. There are several aspects of retirement that should encourage everyone to work toward a healthier BMI:
- Activeness. We all know we should exercise and not eat that second helping in the buffet line. It is easy to lose sight of something that is hard to measure-healthiness-and instead default to what feels good today. But what I see in retirees is pretty stark. Some struggle to do a walking tour in their sixties while others are still hiking Machu Picchu near age 80. Genetics have something to do with health, but so does discipline. The more disciplined you are with eating and exercise, the more control over fun you'll have.
- Spending. Something has to give if you are sick. There is a limit to the money available in life, so if you have to spend more of it on health care, what gets cut? While a cabin, golf or an expensive reading habit are not necessary, they can make retirement more enjoyable. Give careful consideration to the tradeoffs you might be forced to make if you reach retirement in an unhealthy state.
- Assets. As with spending, assets will be affected too. More than just spending assets down, health is a key driver in how we think about issues like taking a pension versus getting a lump sum from your employer, delaying Social Security, or even which person in a marriage should hold title to more of the assets.
- Insurance. Health is the major question if you're pursuing most insurance these days. Consider purchasing long-term care insurance or anything that might require underwriting in your early to mid-50s before health problems kick in.
About Jon T. Meyer, CFP®
Jon T. Meyer, CFP® is the President of Boeckermann, Grafstrom & Mayer Wealth Management, LLC, a Minneapolis-based Registered Investment Advisory firm. Jon specializes in working with retirees and individuals nearing retirement to help them create the income they need in retirement by utilizing advanced social security planning, tax planning and investment strategies. For more information visit http://www.bgmwealth.com.
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http://EzineArticles.com/?expert=Jon_T_MeyerJon T. Meyer, CFP® is the President of Boeckermann, Grafstrom & Mayer Wealth Management, LLC, a Minneapolis-based Registered Investment Advisory firm. Jon specializes in working with retirees and individuals nearing retirement to help them create the income they need in retirement by utilizing advanced social security planning, tax planning and investment strategies. For more information visit http://www.bgmwealth.com.
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