Advertorial – NMG Benefits: Here’s how to

Here’s how to plan for

healthcare costs in retirement

Most South Africans leave their retirement planning too late – and when they do finally get around to it, they often fail to include the rising cost of healthcare in their considerations, which could seriously impact the quality of their lifestyles.

That’s the grim warning from Gary Feldman, Executive Head of Healthcare Consulting for employee benefits firm NMG Benefits, who says many Gary Feldman – Executive Head: consumers do not realise that Healthcare Consulting assistive devices and aids are not always covered by medical aids. StatsSA estimates that nearly one out of every four South Africans over the age of 60 use chronic medication; one in five use assistive devices like glasses; one in 10 wear hearing aids; and 5% use wheelchairs. “If you can’t afford your necessary assistive devices or chronic medication, you may face debilitating pain and even depression due to your physical and financial circumstances,” says

Feldman. On average, healthcare costs tend to sit 3%4% above inflation every year, with few employers offering medical aid subsidies for their retirees. As a result, retirees are under increasing pressure to afford their medical aid premiums. According to Feldman your health care costs in retirement depend on three factors.

2. Your medical scheme plan option

For increasing medical scheme costs, review your plan options regularly. Some medical schemes will allow a downgrade during the year, however many won't allow you to upgrade until the end of the year.

3. When you start saving

Your medical costs will increase as you age therefore it's a good idea to plan early and start saving for these costs while you are younger. The sooner you start saving, the less you will need to save each month to reach your savings goal because you will be saving for a longer period.

To address the problem of consumers who are unprepared for rising healthcare costs, NMG is preparing to launch a retirement annuity, NMG SmartAid, that is dedicated to saving for medical costs in retirement and focuses on the expected income a consumer’s savings can buy at retirement.

The company will provide a calculator to help users determine how much they should be saving for their healthcare needs in retirement, and an annual statement reflective of the member’s on- or off-track status. Members who are not on track are given information on how to get closer to their targets.

1. Your health status

Your current health and your family's medical history can tell you how much you can expect to spend on medical cost as you age. Other important factors include: Are you a smoker? Do you visit the doctor often? Do you have chronic health conditions? www.nmg.co.za