Preparing for Medical Expenses During Retirement: Why It Matters

In 2000, there were 4.5 million Filipinos who were aged 60 or older. 20 years later, that number has more than doubled to 9.2 million, which is at least 8.5% of the total population. That number is projected to increase further in the following years.

In 2023 alone, there was around Php 633.3 billion in household spending on healthcare. WTW, a global advisory and solutions company, has also predicted that healthcare expenses in the Philippines will increase by 18.3% in 2025.

Knowing the most common medical expenses that retirees often encounter can help you prepare and plan for them. Some of the most common healthcare expenses are:

• Check-ups and Consultations. Regular visits to clinics and hospitals for preventive care and management of chronic conditions can quickly add to your healthcare costs in retirement.
• Hospital Treatments. Inpatient care, surgeries, and emergency treatments may be uncommon, but they will be costly if you ever need them.
• Medication and Maintenance. Prescription drugs for chronic ailments translate to ongoing payments, further increasing the weekly or monthly cost of healthcare in retirement.
• Diagnostic Tests. Laboratory tests, imaging, and other diagnostic procedures are expensive and can add up.
• Long-Term Care Services. Nursing home care, home care, and assisted living facilities for retirees who require extended care services translate to long-term expenses.

You’ve learned about the difficulties of preparing for retirement amid the rising healthcare costs. Now it’s time for you to find out the steps you can take to make the process easier for you in the long run. Here are a few things you can do:

Saving while you’re still young is perhaps the simplest way to be better prepared for retirement. Remember, the earlier you  begin saving for healthcare, the more financial security you’ll have in retirement. Consider opening a separate savings account in a passbook account, as it reduces the temptation to withdraw.

You can also set up automatic transfers from your main account to your retirement fund. This setup allows you to automatically transfer a fixed amount of money from your income each month, ensuring consistency in your savings.

As we’ve mentioned before, healthcare costs are expected to rise continuously because of inflation, and it will significantly affect how much you should save for medical expenses in retirement.

Start off by researching the pattern of medical inflation in the country and project future costs based on those trends. Once you’ve determined the inflation percentage, adjust your savings and investments so they can grow at a similar or higher rate.

You can also diversify your investments. Mutual funds, stocks, or real estate can outpace inflation and give you additional income during retirement.

One of the best ways to minimize healthcare expenses during your retirement is to prevent illnesses before they even happen. Leading a healthy lifestyle and making better choices in your diet reduces the likelihood of developing chronic diseases, which translates to lower medical costs.

Avoiding high-sugar and processed food, for instance, can prevent future conditions like diabetes, heart disease, and hypertension from developing. Physical activities, even simple daily walks, can also help, since they prevent mobility and cardiovascular issues, which often arise in years.

Get regular check-ups to detect potential health issues early and make treatments more manageable and cost-effective. Be sure to take care of your stress levels and mental health as well because chronic stress can lead to a weakened immune system and high blood pressure.

While PhilHealth provides basic coverage for treatments, it’s often not enough for all your medical expenses, especially if you need major surgeries or long-term treatments. Private health insurance can greatly reduce out-of-pocket payments and give you better medical options when needed.

When looking for the right insurance plan for your needs, look for policies that offer plenty of coverage, including outpatient services, hospitalization, and even critical illness benefits. Remember that some insurance policies do not allow renewals after reaching a certain age, so be sure to look for plans that offer lifetime coverage so you can enjoy the benefits even during your retirement.

You can also check out Health Maintenance Organizations (HMOs) like Maxicare or Intellicare for routine check-ups and diagnostic procedures.

People in the latter part of their years will sometimes require assistance when performing daily tasks like eating, bathing, and even moving around. That’s the purpose of long-term care services like nursing homes or home-based care. These, however, are costly if you wish to have the best quality of service, so be sure to invest in long-term care insurance if you wish to go down this road.

Some private insurance companies offer policies for long-term care, so seek out the ones that do to help cover your expenses. If you prefer home care, discuss the arrangements with your family members.

Life insurance pays financial support for beneficiaries in the event of the policyholder’s death. On the surface, this might not seem beneficial to you, but some permanent insurance policies build cash value over time, which you’ll be free to access while you’re alive. This makes life insurance for retirement a good plan for medical expenses in retirement and a sound investment for your future.

When securing your future, you should always remember to account for your expenses when you enter your senior years. By saving money early and seeking out the proper health, long-term care, and variable life insurance plans with the appropriate coverage, you can be better prepared to manage your finances and reduce the cost of healthcare during retirement.