What can you start doing now to help your future, retired Self
Your health care costs in retirement depend on a few factors. The good news is that you have some control over most of them. Here are some important factors that you can control now to help your future, retired self.
FACTOR 1: Your health status
The worse your health or your family’s medical history is when you retire, the more you can expect to spend on medical cost as you age. Are you a smoker? Do you visit the doctor often? Do you have chronic health conditions?
If you don’t have any chronic conditions and no family history of them, you’ve never smoked and you don’t go to the doctor often, you can probably plan to spend less on medical costs.
Many medical professionals encourage a healthy lifestyle while you are younger to avoid the burden of mounting medical costs in retirement. Take control of your health. Simple things like diarizing and making time in your busy schedule for your annual check-ups can make a difference down the line.
FACTOR 2: Review your medical scheme plan option
The best way to deal with the ever-increasing medical scheme costs is to review your plan options on a regular basis.
Remember that you can only do this once a year between October mid-December.
Some medical schemes will allow a plan downgrade during the year, but most will not allow you to upgrade.
There may be other medical aid options that are more suited to you and your family. It may be that you are on a plan option that could be reduced, and the difference that you save could be used to fund for other needs such as saving for your health needs in retirement.
FACTOR 3: Start saving early
It’s a reality that your medical costs will increase as you age. It’s a good idea to plan early and start budgeting saving for these costs while you are younger.
The sooner you start saving, the less you will need to save each month to reach your savings goal as you will be saving for a longer period.
There are several tax efficient ways to invest your savings to ensure that these can grow and boost your savings that you have available at retirement to help you cover your medical needs at that time.
You can consider using a tax-free savings account or a retirement annuity fund. If the rule of the fund allow, it may be a good idea to put extra voluntary contributions into your company retirement fund.
If you save extra money for retirement while you are younger and still working, your contributions have time to earn compound interest to help you get a higher monthly income when you retire. You could also pay less tax on your salary or income every month.
The information in this communication is for information purposes and is not intended to be detailed advice described in the Financial Advisory and Intermediary Services Act. The fund, administrator and trustees cannot be held liable for damage or loss suffered as a result of any action that you take based on the contents of this communication.