Unlocking the Treasures of Financial Wellness

While finances and health may seem unrelated, the two are often closely intertwined, especially in America's bustling, free-flowing marketplace. Let's examine two of the largest lifetime expenditures: retirement and health care. The general rule for retirement income is to have 70-80% of your working income available. However, some analysts say you should hit 100% of your annual working income levels during at least the first few years of retirement. Generally, spending habits don't significantly change during retirement. Some expenses may decline while others, such as traveling costs, may increase.1·2 While the average retirement lasts 19 years for men and 21.6 years for women, married couples may fare better: at least one person, on average, is likely to make it to age 93. That could be 30 years or more, depending on the age at which you and your spouse retire.3

With annual U.S. health-care costs rising to $4.1trillion, the industry consumes nearly 20% of the U.S. gross domestic product. What does that mean for the average retiree?4
A healthy couple retiring at the age of 65 can expect to pay nearly $208,000 out of pocket for health care expenses throughout the course of their retirement. This figure does factor in Medicare insurance, which takes effect at 65.One way you can prepare for future health care costs is by taking advantage of tools designed to help you prepare for them, such as a health savings account [HSA]. An HSA is a type of tax­ advantaged savings account that can be used to pay for medical, dental, and vision care as well as prescription drugs. Keep in mind that once you start Medicare, you can no longer contribute pre-tax dollars to your HSA. If you were to withdraw money from your HSA for a non-medical reason, that money becomes taxable income and you face an additional 20% penalty. After age 65, you can take money out without the 20% penalty, but it still becomes taxable income.6
What do you do if your financial health needs some exercise? How do you create a strong bottom line to prepare for an uncertain financial future?

Learn, Learn, Learn

The first step in creating financial wellness is to gain knowledge. Knowledge is power- the power to build robust financial health. Some employers, organizations, and communities offer financial wellness programs. If such programs are available to you, consider signing up. The more you know, the better. The financial world can be complex and confusing. Understanding where the opportunities lie and how to make your way through the muddle of money management may give you a distinctive edge. If your employer doesn't have a program, develop or find one of your own. Do the research. Remember, getting yourself a financial education may set you in the right direction. However, the most valuable, reliable, and up-to-date information may come from a financial professional who can help you with financial wellness programs on budgeting, debt management, and retirement strategies. It's never too late to chart your course to financial wellness.

Create a Budget

It may seem obvious, but creating a budget may be your single most important step toward financial wellness. A budget allows you to monitor and manage your money and better develop strategies to pursue your goals, both short-term and long-term. Some financial professionals say that you should consider using a phone app, online banking, spreadsheets, or old-fashioned pen and paper. A budget can be a tool to track your income and expenditures and better understand your financial habits that may be draining your pocketbook. Budgeting also enables you to spot positive habits and spending patterns that you may want to reinforce or enhance. Furthermore, a budget provides you with openings and opportunities to invest and build your savings.

Set Goals

While budgeting establishes the foundation of your financial health, setting goals sets the direction. Learning about money, debt, wealth management, and investing is good, but without goal setting, you may lack the motivation to make it in the long run. Goal setting provides you with vision. You determine what you have and want to do in your life, and strict money management helps create the catalyst for shaping your future.

Save, Save and Save

Part of goal setting is saving. Saving a portion of your income helps you develop financial discipline and allows you to envision your future more clearly. Saving also applies to-but is not exclusive to- preparing for your retirement. Saving helps keep you smooth and steady on life's path through emergencies and unexpected twists and turns. It also helps you develop your ability to focus on both your short-and long-term goals, as opposed to meeting only your immediate needs. If your company provides a retirement plan, consider participating in it. Contributions to tax-deferred retirement plans indirectly help foster the budget discipline that may help you in the future.

Get Professional Help

Consult with a financial professional. Professionals can provide insight and direction and help you develop a more disciplined approach to managing your personal finances. They can also provide you with the tools to paint your vision of a prosperous future. We hope that you’ve found this guide interesting, informative, and encouraging.

To help you develop a clear plan for your financial goals, reach out to Logix Financial Consultants. We'd welcome the chance to review your approach. Call us at (800) 553-3707 to schedule your no-cost, no-obligation appointment.

Important Disclosures:

These are the views of FMG Suite LLC, and not necessarily those of the named representative, Broker dealer or Investment Advisor, and should not be construed as investment advice. Neither the named representative nor the named Broker dealer or Investment Advisor gives tax or legal advice. All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. Please consult your financial professional for further information.

Citations:

1. MoneyCrasher.com, 2022
2. BusinessInsider.com, 2021
3. Fidelity.com, 2021
4. CMS.gov, 2021
5. HVSFinancial.com, 2021
6. Investopedia.com, 2021