TRAILER

Welcome to episode 78 of the One for the Money podcast. I am always glad and grateful you have taken the time to listen. In this episode I’ll share why the first wealth is health.

In the tips, tricks, and strategies portion I will share a tip regarding Health Saving Accounts.

In this episode...

The Holiday Season [0:57]
Health vs. Wealth [1:57]
Health Expenses in Retirement [4:04]
Exercise and Long-Term Health Benefits [5:38]

MAIN

This episode airs on January 15th when we get a pretty good sense on how well we are doing on the resolutions we made a few weeks back. Often times, those resolutions focus on our health, which makes a lot of sense given all the delicious food we at during the holidays.

According to one medical Journal

Several studies suggest that the holiday season, starting from the last week of November to the first or second week of January, could be critical to gaining weight.

But it’s not just the holiday foods to blame. As noted in an article by the University of Rochester Medical Center

Shorter days, longer nights, cold weather, decreased exercise and changes in sleep habits all contribute to winter weight gain. When you add in the abundance associated with holiday meals and our tendency to overeat at special occasions, many of us enter the New Year a few pounds heavier than we were before Thanksgiving.

This may seem like unusual financial planning advice, but as the great American author Ralph Waldo Emerson said, The first wealth is health. And as Bronnie Ware noted in her Regrets of the dying essay, that health brings a freedom that few realize until it’s gone.

Years ago, I read an article that featured several prominent financial planners who worked with financially wealthy clients and when asked what was the most important advice they gave their clients, all of them emphasized the importance of health. One of the advisors recommended that for those over 50 you should plan to spend at least 1 hour a day on their physical health. Now some might think, of course these clients were already wealthy so they could in turn focus on their health, but it just goes to show that wealth isn’t anything unless one has their health. Many think you should exercise so you can have a longer enjoyable life but often times, your life can be just as long, but just not enjoyable, as I’ve seen in my own family. Many in my family have a long life span but sadly a poor health span which are the years in which you have good enough health to enjoy it.

According to growwellthy.com, which is for an exercise physiologist that helps financial planners stay healthy, 96% of retirees say health is more important than wealth.

The website includes a health check quiz that goes over key elements of one’s health; namely: Nutrition, regular and appropriate exercise, good sleep, ie more than 7 hours a night, taking more than 7000 steps a day, strength train at least 2 times per week, there were also questions regarding one’s physical fitness such as: are you able to get down and up off the floor easily, Can you hang from a bar for at least 30 seconds, do you eat protein at most meals, drink alcohol sparingly and do you drink lots of water? I heard a great quote a while back “A man’s health can be judged by which he takes two at a time — pills or stairs.”

And it’s not just about feeling great, it’s having more money to spend on other things that you would enjoy. It really is in your long term financial interest to INVEST in your health and to keep exercising. Because health expenses in retirement are far higher than what most people anticipate.

According to Fidelity's latest Retiree Health Care Cost Estimate, while individuals expect to incur $75,000 of healthcare costs in retirement, the actual average is $165,000 (assuming the retiree enrolls in Medicare Parts A, B, and D), that’s a large difference. Medicare Part B and Part D premiums are responsible for 43% of this total, out-of-pocket prescription drug costs account for 10%, and other medical expenses (e.g., co-payments, coinsurance, and deductibles) make up the remaining 47%. And while 63% of Americans approaching retirement say they plan to review their Medicare options annually, a separate survey found that retirees aged 75 and older are the least likely to review their coverage each year (despite the potential for savings by comparing plans, given greater medical needs at this point in their lives).

Assessing your medicare options on an annual basis is a hugely important part of your financial planning. I strongly recommend you invest the time and the experts to help you with that decision each year.

And it’s imperative that we continually invest in our health. In episode 29 of this podcast, I shared information from Dr. Peter Attia, a physician whose medical practice focuses on increasing his clients health span. This doctor doesn’t treat the ill, but helps people get healthier. Something that is sorely needed in our society.

Dr. Attia shared that longevity and life span were impacted through major modifiable behaviors such as exercise, sleep, nutrition, and emotional health. But that Exercise is in a league of its own both on its ability to extend life and reduce all-cause mortality.

Dr. Attia shared information from Dr. Mike Joyner an exercise physiologist to further demonstrate his point of why exercise is so critical. Dr. Joyner shared a fascinating study regarding the impact of exercise on life expectancy. This study was conducted by a Dr. Jerry Morris in the UK after WW2 where he studied employees that worked on the iconic red double decker buses you see in London. They compared the health of the persons driving the bus vs the conductor, who was on the same bus, that had to walk up and down the stairs getting tickets. These individuals were followed for years and it was determined that the conductors had about a 50% lower levels of drivers of cardiovascular disease.

Dr. Joyner said that when they studied healthy people that they had a 4-5 year extension in life expectancy but even more interesting is that they also had a 4-5 year extension in health span, meaning how disability free you are. They had 4-5 extra good years and lived a long time and died quickly with minimal disability. Sign me up. I’ll put a link to the podcast in the show notes for those that want to learn more.

But suffice it to say, exercise doesn’t just buy your more time but it buys you more quality time as well.

In conclusion, exercise can extend your life and health span, and may greatly reduce the money you have to spend on healthcare during an early retirement. A great quote I read was this, “Those who think they have not time for bodily exercise will sooner or later have to find time for illness.”Jim Rohn the entrepreneur, author, and motivational speaker also said “Take care of your body, it’s the only place you have to live.”

TIPS, TRICKS AND STRATEGIES

Welcome to tips, tricks and strategies portion of the podcast where I will share a tip regarding how best to pay for health care expenses. While staying healthy you may be able to avoid many of these costs when you do have healthcare costs there is a clear advantage on how to pay for them.

Wouldn’t it be great to get a 20-30% discount on medical expenses? Well the great news is that you can with flexible spending accounts and health savings accounts. Both of these are available regardless of your level of income. Between the two, Health savings accounts have the clear advantage as they don’t need to be used up each year, but if FSA is all that you have, like my wife with her health care plan, it’s still a great way to get a “discount” on any healthcare related expenses.

HSAs are a powerful tool, especially for early retirees as eligibility for medicare doesn’t begin until age 65.

Here are why HSA are so great. These are the only investment vehicle that are triple tax free. Yes triple! The contributions are tax deductible, and both the growth, and distributions (if used for a qualifying medical expense) are tax free and so with HSAs you pay $0 taxes. But not all people are eligible to invest in an HSA. You must have a qualifying high deductible medical plan. Additionally, the contributions are limited to the following amounts in 2025: Individual $4150, and Family $8300. For those 55 and older you can contribute an additional $1000.

You can use the money in the HSA at any time to cover health care expenses. That’s why they are ideal for early retirement. But if you don’t need to use these then you can really see the benefit when you let the money grow and pay for current health care expenses from other sources of personal savings when possible.

But what if you don’t need all of the money for Healthcare Expenses? It essentially becomes just like a Traditional IRA. Distributions are taxed at ordinary income rates.

For my clients that are younger or “youngish” who think they can wait until later, remember that the earlier you invest your monies the longer it has time to grow, and that growth can be significant. Just $2000 invested in an HSA each year for 30 years that earns a 7% rate of return would grow to over $200,000. That would go a long way to help offset health care expenses in your early retirement.

References

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