As an employer, you invest in your employees’ future through retirement benefits, but one critical factor is often overlooked - healthcare costs in retirement. Rising medical expenses can significantly impact retirees' financial security, leading to unexpected reliance on family, government aid, or even delaying retirement all together.
Healthcare inflation outpaces general inflation, making medical expenses one of the biggest threats to a secure retirement. Employees who underestimate these costs may struggle financially post-retirement, potentially returning to the workforce or relying on financial assistance. This challenge affects both productivity and long-term workforce planning.
A recent Just SA survey highlights the issue:
These figures underscore a lack of preparation, leaving many employees vulnerable to rising healthcare costs they have not accounted for.
Many employees assume their medical aid will cover all their needs in retirement, but essential assistive devices and chronic medication are often excluded. According to Statistics SA:
Healthcare inflation is outpacing general inflation. Rising healthcare costs can rapidly deplete retirement savings, leaving employees with fewer options to maintain a comfortable lifestyle. Without proactive planning, these costs can erode financial security, increasing the risk of financial dependence post-retirement.
Forward-thinking employers can take steps to ensure their employees are better prepared:
Investing in employee financial wellness today ensures a stronger, more resilient workforce - one that can retire with dignity, rather than uncertainty.