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Lifestyle and Medical Care: Are They Depleting Your Retirement?

It’s football season—and that means tailgate parties! People love to gather before the game, eat food, shout cheers and show team spirit. But a party like that requires planning and preparation: loading up the grill, packing the cooler, dusting off the camping chairs, buying paper products, even packing AV equipment so you can watch other games before yours. It’s a lot of work, but the work is worth it when everyone comes together to celebrate and enjoy the day.

Unfortunately, some people spend more time planning parties than planning for retirement. And one generation is in serious trouble if they don’t make changes soon. This is your retirement wake-up call!

How Well Are We Planning?

In 2016, Ramsey Solutions commissioned a survey of more than 1,000 U.S. adults to find out how well Americans are preparing for retirement, including Baby Boomers (born 1946–1964). Here’s what we found:

  • Around six in 10 Americans across all age groups are saving for retirement, including Baby Boomers still in the workforce.
  • More than 50% of Gen Xers and more than 30% of Millennials have saved $25,000 or more for retirement.
  • A majority of Baby Boomers still in the workforce have less than $25,000 saved for retirement—and half of those people have no retirement savings.
  • Only 57% of unretired Baby Boomers are still trying to build up their retirement funds.
  • More than half of working Baby Boomers have no plans to save for retirement in the future.

About 10,000 Baby Boomers hit retirement age every day, but a big portion of them aren’t financially prepared for that chapter of their lives. And that’s not okay!

The Culprit for Every Generation

So why aren’t people saving more for their retirement years? According to the study, the cost of living is the biggest reason, no matter which generation you belong in. And while kids’ needs and activities also keep Millennials and Gen Xers from saving more, medical expenses are plaguing Baby Boomers.

Since daily living and medical costs aren’t going away, how can you tackle these two financial tyrants and still put more money away for retirement?

Cost of Living vs. Lifestyle Choices

I get it—where you live can drastically impact how much you can save for retirement. There’s a reason most people don’t move to California or New York when they retire! But there’s a huge difference between the costs of daily life and your lifestyle. You can’t always change cost of living, but you can cut back on your lifestyle. Here are a few areas of your budget you may need to adjust:

  • Entertainment
  • Restaurants
  • Hobbies
  • Cell phone plan
  • Cable or satellite plan
  • Streaming services
  • Gym memberships
  • Subscriptions

Depending on your age and how much you’ve saved, you may also want to downsize to a smaller home and use the extra money toward retirement. I understand that you have countless memories connected to your home, but memories won’t pay the bills when you retire!

Trimming Medical Expenses

Believe me, I understand how your medical expenses change as you get older. I’m not exactly in the youngest age bracket! However, people pay more for their care simply because they don’t know they have options. Finding ways to save on medical costs can be a challenge, but here are some things you can do:

  • Ask your doctor for a lower-priced but equally effective medication.
  • Negotiate charges with your doctor and hospital (yes, that’s possible!).
  • Use a health savings account (or a flexible spending account).
  • Check all medical bills for errors (it happens a lot).
  • Exercise and eat healthy so you can avoid the doctor altogether.
  • Schedule procedures at the end of the year, after you’ve likely met your deductible.
  • See if you qualify for subsidies to pay for insurance premiums.

If you need help navigating the health care maze, you can also talk with a patient advocate. Just like the name implies, these people can help you with doctors, hospitals, pharmacies, physical therapy, insurance companies, and other aspects of your care. Some of these services may be free, so take advantage of their assistance.

There’s Still Hope

Even if you’re behind on your retirement savings, there are still some things you can do to put you in a better situation financially. If you’re a Baby Boomer, keep working and delay retirement. This allows you to save more money now and qualify for more Social Security benefits later.

You may have to adjust your expectations about your retirement, but you can still retire with dignity . . . if you’re willing to make changes and work hard. Your nest egg may be smaller, but you can still enjoy it.

 

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