The Biggest Threats To Your Ability To Retire

When you think about your existing costs, you likely think about your home, your kids, education, travel, eating out.  Those are the ones that tend to crop up when I work with clients.  But one that tends to not be on the list (yet) as it’s own cost to manage is health care costs.


Because health care costs tend to come more into play the older we get, since our bodies start to be less healthy and general ageing issues commence.

But it’s more pernicious than that, because the cost of health care already exists in the form of your health insurance premiums and deductibles, which is an expense almost everyone has.

And it’s going up at a rate you may not be aware of: In 2003 an employee spent ~5% of their income on health insurance premiums and deductibles.

In 2013?


Yes. That’s double  in 10 years.

And these are your working years, before you are in what’s considered the high health care expenses phase of your life, when you are 60+ years old.

So, when you think about your future, and your retirement savings goal, you need to break it down into sub goals:

1. Everyday baseline expenses (eg utilities, groceries, taxes, insurance, gym membership, cell phones,)

2. Everyday discretionary expenses (entertainment, beauty, eating out, liquor/wine/beer, clothing, travel, cable)

3. Home Improvement and Maintenance

4. Vehicle Replacement

5. Health Care

Health Care is now it’s own goal in retirement.


Because it’s a category that will only become bigger through time.

It never goes away and it doesn’t get smaller.

It’s a category that needs to be parsed out so you can consider how you will plan for it.

If you include it in #1 above (everyday baseline expenses), it runs the risk of getting lost in your other costs and your inability to see it as it’s own category to plan and manage for.

The fact that costs have doubled for working adults should raise the alarm for everyone and create a sense of urgency around thinking about how to intentionally fund it as its own goal.

Health Savings Accounts can be part of the solution, and are a main reason to consider High Deductible Health Plans.