The #1 most important factor for happiness in retirement is money, right?
Wrong.
It’s your health. Studies have found that your health is more important than how much money you have, your social network, or any other factor in determining how much you enjoy your retirement.
I was recently reminded of this fact when my whole family came down with a cold. We were miserable. The kids had runny noses and were grumpy. My wife and I were exhausted. I had a few fun things planned for the weekend but wasn’t able to do any of them. No day at the zoo with the kids. No golf on Sunday morning with my friends. I couldn’t enjoy my garden or play with my kids. I couldn’t ride my bike or workout. All I did was sit at home, sneeze, and sleep.
The experience really made me appreciate the importance good health.
Your health is an investment
There are a lot of similarities between your health and your wealth. Both of them are the result of many small decisions you make over your lifetime. Every day you have the opportunity to spend money or save it. Saving a few dollars here and there doesn’t seem to make much difference at the time, but those small decisions add up over time. It’s the effect of the right decisions over many years that lead to great wealth. And it’s the effect of many poor decisions over many years that leads to people retiring with no savings.
To get to $1,000,000 in investments first you have to hit $1K, then $2K, then $10K, then $100K, then $500k. There are lots of small steps along the road to wealth.
You can’t start thinking about building wealth when you’re nearing retirement – by that time it’s just too late.
Similarly, your health is built over time. Every day you have the opportunity to exercise and eat right. Being healthy inside and out is achieved one step at a time. If you’re 30 lbs overweight you didn’t just wake up one morning with 30 additional pounds on you. First you were 1 lb overweight, then 2, then 5, then 10, then 20, then finally 30 lbs overweight. Losing weight takes the reverse course – you first have to lose 1 lb, then 2, then 5, then 10, then 20, then 30 lbs to get to a healthy weight.
Every day you make choices about what to eat. Do you grab fast food because it’s easy and convenient, or do you make an effort to eat plenty of vegetables, some lean protein, and some nuts/seeds? These decisions add up over time, and the accumulated damage of years of poor diet can’t be undone by suddenly changing switching to spinach and quinoa when you’re 65.
You can’t start thinking about your health when you’re nearing retirement – by that time it’s just too late.
Poor health will kill your wealth
For most of us, health care will be our largest cost in retirement. Even worse, those costs are largely unknown and impossible to predict. There’s no way to know if you’ll get cancer or get hit by a drunk driver. There’s no way to know what the US health care system will look like in 10, 20, or 30 years. Maybe we’ll have nationalized health care. Maybe ObamaCare will be repealed and we’ll be back to the patchwork system we had before. Your share of healthcare expenses could be higher or lower than it is today. Healthcare costs have risen faster than inflation and there’s no sign that trend will stop anytime soon.
The only surefire way to reduce your healthcare costs in retirement is to aggressive guard your health today.
Poor health is a downward spiral
Another problem with allowing yourself to become unhealthy is that it’s much harder to become healthy. Let’s say you’ve spent your entire life 100 lbs overweight. The accumulated damage of carrying that much extra weight for all those decades has wrecked havoc on your body. Your knees hurt because the cartridge in them has been worn away. Your back hurts because the discs have been compressed for so long and your feet hurt because your arches have collapsed.
However, you now decide to get healthy. How are you going to do that? You can’t just go for a walk – it HURTS to walk! You can’t get on a bike because you’re too unstable. Maybe you could find a pool and do some aqua aerobics, but you’ll need to drive somewhere, pay for pool access, etc.
Letting yourself get out of shape is just like getting into debt – it’s a downward spiral that feeds on itself. You rack up huge credit card bills and now you have to pay off the monthly interest AND find a way to pay down the principle! You let yourself get out of shape and it’s even harder to get take the first steps (literally and figuratively) towards fitness.
The Prescription
I think if you asked any sick rich person they’d gladly trade everything they own to be healthy again. Your health is more important than your wealth, and yet so many people in the financial independence/investing/early retirement community seem to summon amazing discipline to save money but don’t seem to care nearly as much about their health.
Don’t be one of those people.
Yes, the most important wealth is health. Everything else is secondary.
Unfortunately, it’s also true that human beings are not rational creatures. Thus many people, myself included, will continue to engage in unhealthy behaviors because it’s fun(drinking too much, not getting enough sleep, unprotected sex, driving too fast, partaking in extreme sport, recreational drug use, etc). I just try to do mine, mostly drinking beer, in moderation.
So true. Our lack of rationality shows not just in the general lack of financial planning, but in the various other self-destructive behaviors that we regularly engage in.