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First, the good news: Americans are living longer than ever before.
Now the bad news: Older Americans are spending more and more years in poor health. This dynamic often comes with negative financial consequences, medical and financial experts say.
Since 1960, the average lifespan in the United States has increased to 77.5 from approximately 70 years oldaccording to the Centers for Disease Control and Prevention.
But “health expectations” are decreasing at the same time.
A health span is the number of years older adults spend in good health, said Susan Roberts, professor of medicine and epidemiology and senior associate dean for basic research at Dartmouth College.
Today, the average person spends about 10 years with chronic illnesses like diabetes, cancer, arthritis, cardiovascular disease, dementia, cataracts or osteoporosis, about double the length of time in the 1960s , Roberts said.
As a result, there is a “growing gap” between a person’s lifespan and health, she said.
That’s because medicine has become more effective at keeping sick people alive, without necessarily treating them, Roberts said. Obesity, which is an underlying cause of many chronic diseases, is also more prevalent, she added. Obesity affected 42% of American adults, according to CDC data released in 2021.
How Health Affects Wealth
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The concept of health span is “increasingly important” to a household’s finances, said Stacy Francis, a New York-based certified financial planner and member of CNBC Advisory Board.
Adults are spending more time “living a life where they are not in their best condition,” said Francis, president and CEO of Francis Financial. “And that comes with significant expense.”
About 90% of the nation’s $4.5 trillion in annual health spending goes to people with chronic illnesses and mental health problems. according to at the CDC.
Medical costs become “worse and worse” once people have a chronic illness, Roberts said.
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The average 65-year-old who will retire this year spend around $165,000 health and medical expenses in retirement, up 5% from 2023, according to Fidelity Investments.
Out-of-pocket treatment costs and early retirement due to poor health are two great ways Chronic illnesses take a financial toll on households, experts say.
Retiring early could mean claiming Social Security earlier than expected — which could result in a lower monthly benefit, said Carolyn McClanahan, a physician and CFP based in Jacksonville, Florida.
“A person’s health has a direct impact on their wealth – and this link becomes even more acute as people age,” said Susan Silberman, senior director of research and evaluation at the National Council on Health. aging. said during a briefing in 2022.
Of course, this doesn’t mean that healthy people avoid significant medical expenses.
They may ultimately pay more in the long run than someone in poor health if they need long-term care, for example, which can be expensive and more likely with age, said McClanahan, founder of Life Planning Partners and member of the CNBC advisor. Advice.
Plus, healthy people experience more “go-go” years, meaning they can travel and spend on fun things, she said.
Invest in yourself
“When you’re in your 40s and 50s, that’s the point of no return,” McClanahan said.
If adults don’t start taking care of their health at this age, they become more vulnerable to chronic diseases like diabetes and high blood pressure, which can lead to sudden problems like strokes and heart attacks, a- she declared.
Consider healthy food purchases, gym memberships or exercise classes as an investment in yourself, Francis said. Prioritize spending on your health, and if that seems like too much, try cutting back on spending that “doesn’t increase your health,” she said.
“I look at it as an investment that I put into my 401(k),” Francis said.
“Those extra dollars … will add years to your life and you will make up for them,” she said.
More than half of people can reverse a diabetes diagnosis by losing 10 percent of their weight in the first seven years after that diagnosis, Roberts said.
The “greatest tragedy” of chronic diseases is that “they are preventable,” Roberts said. A few dietary adjustments — eliminating sugary drinks like soda and juice, and eating small, healthy snacks like an apple — can make a “dramatic difference,” she said.
“Learning to love healthy foods is actually not that difficult,” Roberts said. “Practice it for a few weeks and be patient with yourself.”
