Prioritizing Health in Your Financial Planning: Building a Secure and Healthy Future

When people think about financial planning, they often focus on saving and investing for retirement. Yet, health-related expenses are a major part of financial security, especially in retirement. By prioritizing health within your financial plan, you can reduce long-term costs, protect your retirement funds, and enjoy a well-rounded approach to securing your future.

Why Health Belongs in Your Financial Plan
Healthcare costs in retirement are substantial, with the average 65-year-old couple needing about $300,000 to cover healthcare expenses over their lifetime, according to Fidelity’s 2023 estimate. Including health in your financial plan can help you avoid depleting your savings while supporting your quality of life.

Steps to Prioritize Health in Financial Planning

1. Maximize Tax-Advantaged Health Accounts
   • Health Savings Accounts (HSAs): If you have a high-deductible health plan (HDHP), HSAs offer triple tax benefits: tax-free contributions, tax-free growth, and tax-free withdrawals for qualified expenses. In addition to covering immediate healthcare expenses, HSAs offer investment options similar to 401(k)s, allowing account holders to invest and grow their funds tax-free for future healthcare needs. Over time, the growth potential of an invested HSA can provide a significant healthcare cushion for retirement.
   • State-Specific Information: Most states treat HSA contributions as tax-deductible, though a few do not. It’s worth checking your state’s HSA treatment for a complete picture of the benefits.
   • Medicare Considerations: It’s important to note that HSA contributions must stop once you enroll in Medicare. However, you can still use existing HSA funds to pay for qualified healthcare expenses, making an HSA a valuable resource for retirees who planned ahead.
2. Utilize Employer Benefits for Health and Wellness
   Many employers offer wellness stipends, gym memberships, or mental health support that can offset out-of-pocket costs. According to a 2023 SHRM report, over 60% of companies offer wellness programs, and many employees don’t fully utilize them. For instance, if your employer provides a wellness stipend, you could use it to cover fitness or mental health expenses, benefiting your health without impacting your budget.
3. Integrate Mental Health into Your Financial Plan
   Mental health is increasingly recognized as a critical part of well-being with significant financial implications. Beyond therapy, which may be covered by HSAs and FSAs, budgeting for mental health-related activities—such as wellness retreats, support groups, or mindfulness programs—can reduce stress and contribute to productivity and quality of life. According to the National Institute of Mental Health, investing in mental health can decrease costs related to lost productivity, which impacts the economy by an estimated $300 billion annually.
4. Leverage Technology to Track Health and Expenses
   Health-tracking apps and wearable devices allow you to monitor activity, sleep, and stress levels, helping to prevent costly health issues. Some apps connect with insurance plans to track medical spending and suggest cost-saving measures. Additionally, insurers may offer premium discounts for users who meet certain activity goals. Integrating these tools can improve health and lead to reduced healthcare expenses.
5. Consider Long-Term Care Planning
   Long-term care (LTC) expenses, like in-home care or nursing facilities, can be significant in retirement. Traditional LTC insurance is one way to cover these costs, but hybrid policies are also available. Hybrid policies combine life insurance with LTC benefits, offering the option to access funds for long-term care if needed. This can be a flexible alternative to traditional LTC insurance, providing benefits whether or not long-term care becomes necessary.

Final Thoughts: Investing in a Healthier Financial Future
By incorporating health considerations into your financial plan, you’re investing in both financial security and overall well-being. Maximizing HSAs, leveraging employer benefits, budgeting for mental health, and planning for LTC needs can create a comprehensive strategy that supports a healthier, more financially secure retirement. Start planning now to set a strong foundation for a healthy future.