According to The New York Times,
Those men and women who reported exercising moderately throughout their adult lives, walking or otherwise being in motion for a few hours most weeks, saved an average of $1,350 annually s— or about 16 percent — on health care expenses after reaching age 65 compared to sedentary people.
Just think: if you take walks daily or several times a week for 20 years, from 65 to 85, not only will you feel and actually BE healthier, you'll save $27,000 too! And we're not talking strenuous zigzag climbs up a mountain. Moderate walks for 30-45 minutes is all that's required.
For the bean counters in the audience, if you use up a pair of sneakers per year then you can deduct $1,000 ($50 a pair), still netting a savings of $26,000.
If you live longer of course there's even bigger savings. This website offers a questionnaire in order to figure out how long you might live.
On the flip side, according to Fidelity, you may have to shell out $300,000 for health care costs if you're a couple retiring in the USA.
What if you're single? For single retirees, the 2021 estimate is $157,000 for women and $143,000 for men.
Baseline costs: In the USA Medicare Part A is usually free (if you've paid 40 quarters of Medicare insurance during your working years) and $148.50 a month for supplemental Part B Medicare insurance.
Some simple math, assuming you're a single male, 65 years old:
Part A Medicare $0
Part B Medicare $149
Additional costs: $143,000 / 20 years (240 months) = $596 month
Total = $645 per month
These numbers may seem daunting, especially considering that:
American households had a median balance of $5,300 in their transaction bank accounts in 2019, according to data collected by the Federal Reserve.
On the other hand, homeowner equity continues to rise:
Homeowner equity in trillion U.S. dollars
One idea that might be worth considering, if you have equity in your home, is to use a service to extract cash, with no monthly payments (a reverse mortgage).
You can use that cash to stretch even further if you:
- move to a country with a low cost of living
- renting your home via a property management service
By doing so you can maintain the value of your home by removing only the increase in equity (via a reverse mortgage), as well as receive an income stream from renting your home.
Home equity gains: In the last three months of 2020 homes with a mortgage gained $26,300 in equity (on average) versus a year earlier, according to real estate information company CoreLogic. That average gain is the highest since 2013, the firm said.
Of course not every year will be like 2020, but consider that if your equity increases even $18,000 a year that's $1,500 a month.
Imagine pulling that money out while not losing any value in your home and spending a year living abroad. Chances are that you can pay rent in a country like Spain or Portugal and still earn a profit from the rent you'd be charging for your own home.
If there was ever a time to consider the good fortune you've had as a homeowner, it's been during these troubling times of the covid-19 pandemic.
The good news is that the world is opening up again, slowly but surely. There are many ways to explore it, one of which is by rethinking that Tiffany nest egg you've been sitting on.
How about rethinking it during your daily walks!