Managing health risks in retirement

Throughout life, more health-related issues can have a huge impact on your finances. In retirement, it's important to understand these health-related risks and how to manage them.

Your health can be impacted by many life events including medical, long-term care, disability, frailty, early death or loss of partner, and longevity. Most people face similar health concerns, but the frequency and severity of these concerns tend to increase with age.

In addition, as we age, we may be unable to handle the additional financial strain associated with these health events. Managing these risks may be accomplished through a combination of planning, savings and insurance coverage. It's important to understand your situation is unique, and not all these factors may apply to you.

• Medical. The danger of having inadequate medical insurance to cover events that could reduce earnings, increase expenses or both.
• Long-term care. The possibility that dementia or physical limitations could restrict a person from performing the activities of daily living. This person may require custodial or medical care either at home or in a facility that provides varying degrees of assistance. of assistance.
• Disability. The potential loss of income or additional expenses that would be incurred due to physical or mental disability.
• Frailty. The threat that a member could be limited in their ability to manage their finances due to mental or physical limitations.
• Early death or loss of partner. The financial hardships that may arise upon the loss of a spouse or partner.
• Longevity. The probability of outliving resources by living longer than planned.

Health issues can impact your family's income and expenses for long periods of time. The impact also tends to be greater in retirement. As we age, we can get sick and injured more often, and when we do, the physical and financial impacts are greater.

Proper planning, combined with cash flow management and proper insurance coverage, can help retirees manage these threats to their physical and financial health. Although there are many ways to help manage health risks, consider a few of the following strategies:

• Seek professional advice to develop a comprehensive financial plan that includes health care planning and long-term care.
• Involve a trusted family member in your financial affairs.
• Have a medical and long-term care plan involving family or consider purchasing long-term care insurance.
• Consider using all financial resources to help pay for health-related events. These can include using the equity in your home through downsizing, home equity loans or a reverse mortgage.
• To get guaranteed^{See note1} income, put some of your money in an income annuity. This will give you protected income in retirement and help simplify some financial decisions.

Your retirement plan should depend on your unique circumstances. See if you're on track for retirement. Contact a Retirement Income Specialist at 800-531-3392.