The loss of health is more costly to a retiree’s overall experience in retirement than the loss of wealth. A study by MassMutual reveals 80% of retirees in better health report having a positive experience in retirement, compared to 59% of those who are in poorer health, regardless of how many assets they own.
The study also finds that among retirees in better health, seven out of 10 (73%) say they feel financially secure, while only half (51%) who are in poorer health say the same. Further, retires in poorer health are twice as likely to feel anxious about their finances and lack a sense of purpose, and three times more likely to feel lonely, compared to their counterparts in better health.
“The message for both retirees and pre-retirees is that health has a major impact on satisfaction with life in retirement. We need to focus on our health as much as possible so we can enjoy life to the fullest extent in our later years,” says Elaine Sarsynski, executive vice president of MassMutual Retirement Services and Worksite Insurance. “While none of us can predict how healthy we will be in the future, we can help influence the outcome by making lifestyle choices that promote good health.”
Statistics show four in 10 retirees overall spend more on health care than they expected before retiring, with 43% spending more than $5,000 annually and 14% spending more than $10,000. In focus group discussions, many retirees talked about working longer to maintain their health care insurance. However, earlier research by MassMutual showed that nearly half (45%) of all retirees retired sooner than they anticipated.
Mathew Greenwald, president of Greenwald & Associates, explains that the study focused on people in the first 15 years of retirement and in many cases, serious medical issues arise after that, in older age. The research points to the fact that better health has an impact on most people’s ability to fully enjoy retirement, even in the healthiest part of their retirement years. As retirees age, many health issues will only be exacerbated, “which puts an exclamation point on the importance of wellness,” says Greenwald.
While retirees in better health are more likely to feel financially secure, enjoy retirement, feel fulfilled, and are less likely to experience negative emotions, the report also shows they are more likely to engage in activities such as travel, exercise and recreation and hobbies. Specifically, they are more likely to attend sporting and entertainment events and spend time with family and friends.
The “Health, Wealth and Happiness in Retirement” study is part of a larger research project conducted in 2014 that surveyed 905 retirees who were one to 15 years into retirement. Respondents were at least 40 years old, have at least $50,000 in savings and investments, and share a role in the household’s financial decision-making.