How to Avoid Living on the Edge in Retirement
The March/April 2010 issue of AARP The Magazine contains a compelling story titled Living On The Edge. The article tells some heart-wrenching stories about seniors who don't have enough money to put food on the table, but whom the government doesn't count as "poor" and therefore aren't eligible for aid. These were people like you and me--responsible people who had jobs, owned homes, and were respected in their communities. They were living the American Dream.
The common thread throughout their stories was the onset of expensive, debilitating medical conditions that ate up their savings and prevented them from earning necessary wages. The downturn in the stock market and housing prices simply magnified their problems. Falling out of the middle class was easy. As one interviewee said, "I don't care what your income bracket is, I don't think anybody is secure."
The article focused on the need to change the eligibility conditions to receive government aid, so that people in these situations can get help. That is one possible solution, and I'm glad the article is focusing attention on this important issue. However, I think we also need to focus on another possible solution--can we take steps now to help prevent this from happening to us or our families?
It turns out the answer is a resounding YES! There's plenty of medical research that suggests that half to two-thirds of Americans' medical bills result from lifestyle decisions that people make every day regarding nutrition, exercise, stress management, smoking, alcohol abuse and so on. By making healthy decisions in these areas, we can dramatically reduce the odds of incurring some expensive medical conditions. But unfortunately, healthy decisions can't guarantee a disease-free future.
Now, I have to be careful here. I'm not passing judgment on the interviewees in the article. Quite possibly, they made all the right decisions and still were unlucky when it came to their health. They're certainly in a tough spot, and my heart goes out to them.
But I do know that we'd see far fewer of these types of stories if all of us made better lifestyle choices. And who knows? If we dramatically reduce the numbers of Americans who need medical care, then maybe the law of supply and demand would drive down the cost of medical care for the people who can't avoid severe medical conditions.
So I see a triple benefit to making the healthiest possible lifestyle decisions:
- We dramatically reduce the odds of incurring these unfortunate conditions in the future, potentially saving us a lot of money in our retirement years.
- We look and feel better now.
- We're helping our fellow citizens by staying out of the medical system, doing our own part to contain medical costs.
Please join me in making these important changes in our lives. When it comes to retirement planning, these steps are just as important as our financial planning.
Steve Vernon
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Steve Vernon helped large employers design and manage their retirement programs for more than 35 years as a consulting actuary. Now he's a research scholar for the Stanford Center on Longevity, where he helps collect, direct and disseminate research that will improve the financial security of seniors. He's also president of Rest-of-Life Communications, delivers retirement planning workshops
and authored Retirement Game-Changers: Strategies for a Healthy, Financially Secure and Fulfilling Long Life and Money for Life: Turn Your IRA and 401(k) Into a Lifetime Retirement Paycheck.
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