Health Challenges In and Out of Retirement

One main priority for individuals within and outside of retirement are the health challenges that could pop up at a moment’s notice. According to TCRS, healthcare and the long-term costs associated with it are among the greatest retirement fears for the middle class. Specifically, 40% say they are worried about declining health that will require long-term care, 33% are anxious about cognitive decline, dementia, and Alzheimer’s disease, and 32% are nervous about possible long-term care costs. In fact, out of all respondents surveyed, just 14% are “very confident” in their ability to afford long-term care.

In the workforce, these implications can be two-fold, explains Collinson. “As adult children, it’s likely they will be called upon to be an unpaid caregiver, and that responsibility can come at a time when they need to be focused on saving and planning for their own retirement. It can actually prove to be a setback for them,” she said. “And as each day passes, we get a day older, and down the road, many of us may need long-term care or support.”

This is especially true for female workers. According to Deloitte Consulting, female patients collectively spend $15.4 billion more on out-of-pocket medical expenses annually compared to their males due to unique and expensive medical needs, including egg freezing and in-vitro fertilization (IVF), health challenges related to menopause, and pregnancy and post-partum medical needs. Female workers are also likelier to live longer than men.

The proliferation of high-deductible healthcare plans, or health savings account (HSA) plans, can offer a lifeline for participants daunting on expensive medical costs. Such plans offer participants triple-tax benefits, catch-up contributions beginning at age 55, and other opportunities to use those funds for retirement savings or future healthcare needs.