Health, not just wealth, matters

When planning for your retirement, remember this: “Fiscal fitness is tied to your physical fitness.”

Working that second job instead of going for a weekend jog may not prove as helpful in securing a happy retirement as it might seem.

That’s because thosewho retire in poor health need to replace a much larger share of their preretirement income — as much as 20 percent more — according to a recent report from Fidelity Investments.

Fidelity actually put some numbers to the trade-off:

Someone in poor health making $80,000 a year before retirement would need to replace as much as 96 percent of their preretirement income, or about $76,800.

By contrast, someone who maintains good health before and after retirement could make it on closer to 77 percent of their pre-retirement income, or $61,600.

“Fiscal fitness is tied to your physical fitness,” said John Sweeney, executive vice president of retirement and investing strategies at Boston-based Fidelity.

Most retirees fall under Medicare, so the issue isn’t with basic health-insurance coverage. But poor health generates additional expenses in terms of doctor co-pays, prescriptions and elective surgeries, he said.

Given that health care costs are rising at two to three times the overall rate of inflation, those needing ongoing treatment can expect to fall further behind over time.

Of course, there are tradeoffs. A healthier retiree, who is more likely to spend money on traveling and recreational activities, has a greater chance of living so long that they outstrip their savings.

Surveys show Americans are concerned about health care costs, both before and after retirement. But they also show a big disconnect.

About seven out of 10 adults expect to be healthy in retirement, but only 20 percent of U.S. adults meet the minimum standards for physical activity recommended by the Centers for Disease Control and Prevention, and more than 35 percent are obese.

That could explain why a Fidelity survey last year showed respondents estimating they would need to set aside $100,000 per couple for out-ofpocket health care costs across retirement, while studies of actual spending put the figure closer to $220,000.

Given that metro Denver ranks among the fittest metropolitan areas, the outlook for retirees is better here than in many parts of the country, Sweeney said.