Don't let healthcare costs derail your retirement: Plan ahead with SmartAid

Gary Feldman
25 June 2024
4 min read

Retirement is meant to be a time of rest after years of hard work, but one of the most significant expenses retirees face is healthcare. The rising cost of healthcare can derail retirement plans, especially in the event of a major health issue requiring ongoing treatment. Just SA’s survey revealed alarming statistics:

  • 57% of respondents plan to rely on their children and grandchildren
  • 42% expect support from siblings or other family members
  • 27% plan to depend on the government
  • 14% hope to rely on friends
  • 10% don’t have a plan
  • Only 9% believe their retirement funds will be sufficient

These figures suggest that many South Africans have not accounted for healthcare costs in their retirement planning. These statistics prove without a doubt that not only are the majority of South Africans leaving retirement planning until it is too late – if they even plan at all – the rising cost of healthcare is not included in their considerations.

Fact: Healthcare costs rise with age and are often underestimated

Many people don’t realise that medical aids don’t always cover assistive devices and other necessary aids. Statistics SA estimates that:

  • 38% of South Africans over 60 use chronic medication
  • 20% use assistive devices like spectacles
  • 10% wear hearing aids
  • 5% use wheelchairs

Fact: Healthcare inflation outpaces general inflation

Healthcare costs tend to rise faster than general inflation, putting additional financial strain on retirees. Without proactive planning, these rising costs can quickly erode retirement savings, making it challenging to maintain a comfortable and healthy lifestyle in retirement.

Plan ahead with SmartAid

To address the critical need for healthcare planning in retirement, try the NMG SmartAid calculator, which helps you save for your medical aid contributions after you retire.

Alternatively, enquire about SmartAid, which allows a member or employee to invest in a retirement annuity separately from their pension or provident fund for an enhanced quality of life in retirement. It includes an assessment of each member’s circumstances to determine if they are on track to meet their specific needs, along with an annual personalised statement reflecting their status.

Plan for your healthcare costs today

Your healthcare costs in retirement depend on three main factors: your health status, your medical scheme plan option, and when you start saving. Taking control of these factors now can significantly impact your future financial security:

  • Health status: your current health and family medical history can indicate future medical costs. Leading a healthy lifestyle now can help mitigate these costs later
  • Medical scheme plan option: regularly review and adjust your plan to ensure it suits your needs and allows you to save for retirement healthcare costs

When you start saving: the earlier you start, the less you need to save monthly. Tax-efficient saving options like tax-free savings accounts or retirement annuity funds can boost your retirement savings.

T&Cs apply. NMG Consultants and Actuaries (Pty) LTD is an authorised financial services provider FSP 12968


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