Why health insurance is crucial in retirement planning
Fri Oct. 27th 2017
If you're saving for your retirement you're doing something right, but don't let your health hinder your retirement.
Don't let your health hinder your retirement
If you're saving for retirement, you're doing something right. Whether you're putting money into KiwiSaver, investing wisely, or just putting a few dollars into savings every week, you're setting yourself up for a more comfortable retirement- and who doesn't want that after decades of hard work?
But savings aren't the only thing you need to worry about as you get older. If you don't think about your health as well, all that careful saving could be undone by medical expenses. Unfortunately, health insurance is something many New Zealanders don't think about until it's too late.
Getting older is bad for your health
It's not fun, but it's a fact. As we age, our health tends to decline. Even if you make healthy choices and stay active, you can still suffer from age-related illness. Even worse, older people are more likely to suffer from chronic or ongoing conditions like heart disease, diabetes, and arthritis. In fact, one study showed that 86% of people over the age of 65 have some type of chronic health condition.
Not only are we more likely to get sick as we age, but we also find it harder to recover - it takes longer, on average, for older people to get well after being sick. So if the worst happens and you do suffer from poor health, you want to be able to focus on looking after yourself - without being stressed or worried about paying for your treatment.
Waiting list woes
We are lucky enough to have a great health care system in New Zealand. If you have a health emergency or a life threatening illness, you'll get prompt, high-quality care at little or no cost.
But if you suffer - as many older people do - from a painful or debilitating condition that doesn't threaten your life, you could face a long wait before you get treatment. Waiting lists for elective surgery can be months, or even years, leaving you with a lower quality of life in the meantime. If you're living with constant pain or limited mobility, you won't be making the most of your retirement.
You also need to think about the expense of ongoing medication, medical supplies or equipment, and services like home nursing or assistance. Although some of these things are funded or subsidised, some are not, and you may not be able to access what you need, when you need it.
Private care gives you more options
Of course, you can pay out of your own pocket for private healthcare. Unfortunately, you could find yourself dipping into your retirement fund to do so. Because we live in a country with great public care, most New Zealanders aren't aware of how much medical procedures actually cost.
Shockingly, a single heart valve operation can cost between $48,000 - $60,000, a hip replacement between $15,000 - $25,000, and a hysterectomy $7,000 - $15,000 - all of which could put a serious dent in your savings. Even more procedures, like a colonoscopy ($1,000 - $2,000), varicose vein removal ($6,000 - $11,000) and hernia repair ($3,500 - $10,000) can be surprisingly expensive.
Health insurance means you can access life changing procedures and surgeries quickly, without spending your hard earned savings. Depending on your choice of health insurance, most elective surgeries and procedures will be covered - and you'll often also get cover for things like medication, follow up appointments, and medical equipment to help you recover.
Don't let ill health slow you down
Retirement is meant to be enjoyed. But that's not easy if you're struggling with a painful or limiting medical condition. It's also hard to enjoy if you're stressed about money - which could happen if your savings are wiped out by medical expenses.
Health insurance is all about being smart and well prepared, so if the worst happens, you have options. Health insurance can't prevent illness, but it can make it easier to get well again.
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