Here’s how to plan for healthcare costs in retirement

NMG Benefits
13 November 2022
2 min read

Most South Africans leave their retirement planning too late – and when they do finally get around to it, they often fail to include the rising cost of healthcare in their considerations, which could seriously impact the quality of their lifestyles.

That’s the grim warning from Gary Feldman, Executive Head of Healthcare Consulting for employee benefits firm NMG Benefits, who says many consumers do not realise that assistive devices and aids are not always covered by medical aids. StatsSA estimates that nearly one out of every four South Africans over the age of 60 use chronic medication; one in five use assistive devices like glasses; one in 10 wear hearing aids; and 5% use wheelchairs.

“If you can’t afford your necessary assistive devices or chronic medication, you may face debilitating pain and even depression due to your physical and financial circumstances,” says Feldman.

On average, healthcare costs tend to sit 3%-4% above inflation every year, with few employers offering medical aid subsidies for their retirees. As a result, retirees are under increasing pressure to afford their medical aid premiums.

Your health care costs in retirement depend on three factors, says Feldman.

Your health status

Your current health and your family's medical history can tell you how much you can expect to spend on medical cost as you age. Other important factors include: Are you a smoker? Do you visit the doctor often? Do you have chronic health conditions?

Your medical scheme plan option

The best way to deal with increasing medical scheme costs is to review your plan options regularly. Some medical schemes will allow a plan downgrade during the year, but most will not allow you to upgrade until the end of the year.

When you start saving

Your medical costs will increase as you age. As a result, it's a good idea to plan early and start saving for these costs while you are younger. The sooner you start saving, the less you will need to save each month to reach your savings goal because you will be saving for a longer period.

To address the problem of consumers who are unprepared for rising healthcare costs, NMG is preparing to launch a retirement annuity, NMG SmartAid, that is dedicated to saving for medical costs in retirement and focusing on the expected income a consumer’s savings can buy at retirement.

The company will provide a calculator help users determine how much they should be saving for their healthcare needs in retirement, as well as an annual statement that reflects the member’s on- or off-track status. Members who are not on track are given information on the actions they need to take to get closer to their targets.

T&Cs apply. The NMG SA Group of Companies are authorised financial services providers t/a NMG Benefits.


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