How Will You Take Care of Your Medical Expenses at Retirement?

By Korir Isaac / Published May 19, 2022 | 11:26 am

KEY POINTS

There are a few ways of preparing yourself. First and foremost, save when you are still earning an income. You can easily do this by joining a retirement scheme during your working days and regularly contributing, helping your savings to grow.

KEY TAKEAWAYS

NSSF invests your contributions in long term assets to earn optimal returns over time. By law, retirement schemes are required to diversify their investments, thereby reducing investment risk. This means that your money is always safe and will always be available to you.

Medical expenses at retirement can be unpredictable and require adequate planning so that you are not caught off guard. With old age comes a weaker immune system, increased susceptibility to diseases and, in some instances, complicated health conditions that may sometimes cost a fortune to manage.

While the total cost of medical expenses in your old age is unpredictable, what is predictable is that the costs will be higher. As such, everyone needs to find a buffer against these expenses.

With a sizable nest egg waiting for you when you retire during your old age, you can dedicate some of that amount to cover medical expenses – that is, if you do not have post-retirement medical cover.

Of course, you will want to save your money with an institution or system that offers you an attractive return. But to be able to finance a happy lifestyle and cover your hospital bills (if any), you must contribute more to your retirement scheme. This way, your savings are not just an investment in your future.

When you save for retirement with the National Social Security Fund (NSSF), your savings will garner interest on top of your yearly returns. This way, your money compounds over the years, growing for you until you retire and claim them.

It would be best to consider that medical insurance at older ages does not cover all conditions and sicknesses. Additionally, the premiums even for more common diseases are higher. Medical insurance may also limit the hospitals and doctors you can visit. Therefore, you need to save enough to ensure that you have enough cash to help you get along without a hassle.

Alternatively, you could take care of yourself now. Listen to your body, eat well, exercise, and if you have a pre-existing condition, follow your doctor’s advice. This may mean a marginal increase in your spending on healthier foods and gym subscriptions for those who lack exercise space in urban areas.

The best plan of action is to save as much as possible and live as healthy a lifestyle as possible. Nevertheless, a healthier lifestyle may mean a longer life expectancy, and since old age is inevitable, we get back to saving for your retirement again. A longer life expectancy equates to more years in retirement, which requires early planning.

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The trick is to save more in your most productive years. Making your contributions to NSSF is a great way to start. There’s no limit to how much you can contribute, but the minimum is 200 shillings.

NSSF invests your contributions in long term assets to earn optimal returns over time. By law, retirement schemes are required to diversify their investments, thereby reducing investment risk. This means that your money is always safe and will always be available to you.

The beauty is that you only need a minimum of 200 shillings to get started. You can then contribute the same amount every month or 1,000 shillings and more if you can. The goal here is to have a significant social security net when you are no longer working.

Opt for the Haba Haba NSSF product for members in the informal sector, for instance. You can save a minimum of 25 shillings a day, with the option of withdrawing 50 percent of your contribution after consistently contributing for five years.

You can become an NSSF member simply by dialling *303# or visiting the nearest NSSF office.

That said, saving for retirement helps ensure that you are well cared for when you are old. This is important in terms of health. Your medical bills will continue to increase as you get older, so you should start planning for them now.

While you may be able to live on your own and care for yourself when you first enter into retirement, there may come the point in time when you can no longer do so. If and when that time comes, and you are financially prepared, you will be able to afford the cost of long-term care.

About Korir Isaac

A creative, tenacious, and passionate journalist with impeccable ethics and a nose for anticipated and spontaneous news. He may not say it, but he sure can make one hell of a story.

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