Live Long and Prosper – Yes, They Go Together – Twin Cities

During one of our team meetings to discuss what to write about this quarter, someone asked us a provocative question: “What is, in your long experience as a financial adviser, the only thing what keeps most people from getting rich on a lasting basis? As is sometimes – not often – the case, Bruce and I differ in our outlook. Bruce said it’s people who get in the way when making financial decisions, even when they rationally know that a particular decision isn’t in their best interest.

Bruce Helmer and Peg Webb

While I think Bruce is right that people are sometimes their worst enemy when it comes to money, the answer for me was straightforward and simple: health. Unfortunately, I have seen so many people who spend their lives working and saving and cannot enjoy what they have achieved due to poor health. In this article, I will explain why I think health is real wealth and why it is so important to take care of our physical well-being in addition to our finances.

HEALTH IS WEALTH

In our culture, we tend to view health as one issue and planning for wealth or retirement as another. Yet many of us now realize how closely linked health and wealth are. My experience as an advisor has convinced me that poor financial well-being can lead to poor health, and vice versa.

The fallout from the COVID-19 pandemic has caused many people to assess their own financial security in the context of their physical and mental health. Notably, a 2019 study showed that 4 in 10 retirees retired earlier than expected, often due to changes in their health status or disability. In fact, health affects every aspect of the financial planning work our firm does:

Longevity — By 2060, life expectancy for the total US population is expected to increase by about six years, from 79.7 in 2017 to 85.6 in 2060, according to the US Census. A longer estimated lifespan may mean a longer and more meaningful retirement for many, but it will also require a larger amount of savings and investments to fund. And it can be daunting without careful planning, especially in the areas of exploring housing options and community support systems, assessing long-term transportation needs, and nurturing relationships that will help you. will sustain into old age.

Expected health care costs — In addition to health insurance premiums, which increase with age, many retirees have to factor in caregiver costs. In fact, 7 out of 10 people will need long-term care in their lifetime. You may be surprised to learn that the median cost for a home health aide in the Minneapolis area is $84,656. What if you don’t need medical help at home? More and more senior homeowners are turning to the help of a “house manager,” someone who can plan and oversee home maintenance and repairs. Some house managers even run errands and manage household bills. The average annual salary for a house manager (also in Minneapolis) is $49,381, according to ZipRecruiter.

Expenditure patterns — Conventional wisdom suggests that you should plan to replace 70% to 80% of your pre-retirement income upon retirement, assuming you will spend less. But what really happens is that healthy people tend to spend more – often much more – in the early years of retirement, when they travel, pursue a hobby or start a business. new “lifestyle” business. Once this initial burst of spending wears off, their spending plummets for a decade or two and then rises again as healthcare spending rises sharply later in life. But, again, there are no clear spending patterns, and planning for those dips and peaks is essential. Additionally, health issues can have a significant impact on life goals, with mobility issues disrupting active lifestyles and travel, heart attacks and strokes changing lives virtually overnight, and with Alzheimer’s disease affecting more older (and younger) Americans each year.

Start of social security benefits — Most people are told to put off taking Social Security for as long as possible because the benefit typically increases about 8% each year past the full retirement age of 66 or 67, depending on your anniversary. But this decision must be weighed against your state of health. If you have a chronic condition or longevity isn’t in your genes, taking your benefits much earlier makes sense.

WHY ARE WE HERE?

This age-old question is often thought to be about making a lot of money and being successful. But what research shows us is that having a purpose in life leads to better health and happiness. A sense of purpose is associated with better functioning of the immune system, faster rates of recovery from illness or injury, and slower rates of cognitive decline. For this reason, many people approaching retirement age decide to continue working, at least part-time or as a volunteer.

Relationships matter too: Social isolation is sometimes associated with high blood pressure, inflammation and cognitive decline, and is a risk factor for other chronic diseases.

To enjoy financial well-being, health must be part of your daily routine. That’s why I believe having a daily routine of vigorous exercise, good nutrition, and developing strong, lasting personal relationships are essential to living a better, longer life.

The opinions expressed herein are for general information only and are not intended to provide specific advice or recommendations to any individual.

Bruce Helmer and Peg Webb are financial advisors at Wealth Enhancement Group and co-hosts of “Your Money” on KLKS 100.1 FM on Sunday mornings. Email Bruce and Peg at [email protected] Securities offered by LPL Financial, member FINRA/SIPC. Advisory services offered by Wealth Enhancement Advisory Services, LLC, a registered investment adviser. Wealth Enhancement Group and Wealth Enhancement Advisory Services are separate entities from LPL Financial.

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