Jan
28
Rethinking Retirement: How Health Savings Can Double as Retirement Savings
Filed Under Life Insurance
Remember when the word “retirement” conjured up images of a withered old man, shuffling out of the office on his last day, clutching a gold watch and some amusing greeting cards? Those days are thankfully done and over with now that people are living longer, and living better. Despite all of the doomsayers reports to the contrary, we are eating better and getting out more, and it shows in our longevity. Your commitment to healthy living can add up to more money as well as more years, if you know how.
We all know that health insurance rates go by your age, your height/weight ratio and your habits. For each bad habit that you have, your premium goes up. Likewise for your weight, for every bit of extra poundage, you pay for higher insurance.
Losing some weight and some bad habits can save your life, but for some people, the thought of saving money is a far bigger motivator.
But how can you make any of these savings double as retirement savings? It’s simple, really. Start by looking at your current health insurance costs and then compare it with a policy for someone of the same age who is in better health or better shape. Figure that as a starting point.
If you save, say $20 per month on your health insurance, that is $240 in a year. It may not sound like much, but when you figure in the other savings, it adds up.
For instance, if you stop eating fast food for lunch every day, and bring healthier food from home, how much have you saved in one week? Figuring your typical burger place value meal costs between 5-6$, then you are saving 25-30$ per week.(Not to mention your arteries.) In a year’s time, that equals out to $1200 to a little over $1500. Save that amount every year for ten years, and you have a $15,000 nest egg that you earned simply by making a better food choice. Add a walk around the block during that lunch period and you will probably shed enough weight to be classified differently on the insurance forms, earning you that lower rate.
Stop smoking and use the proceeds to fund a high yield money market IRA or other investment. Once you figure out the cost of lighting up per year, it may be all the motivation that you need.
End that nasty habit and your insurance rates drop even more. In one comparison of similar policies, a non smoker’s rate was nearly 30$ cheaper than that of the smoker of the same age. Your lungs, your body and your wallet will thank you if you stop.
So, between the better policy rate, the savings from not eating out and the savings from not smoking, you have quite a bit of extra cash on hand. Now is the time to meet with a financial advisor and talk about making that the seed money that will grow your retirement savings.
You have worked that hard to live longer, you owe it to yourself to live it well.
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