Combating Rising Medical Costs in Retirement Planning

Are you worried about your retirement savings being gobbled up by skyrocketing medical costs? You're not alone.  We covered this in Chills 174 where we unpacked the insights and discover how we can protect our golden years from the menace of medical inflation.

Our panel of guests on today’s episode include:

1. Craig McGee: Co-founder of Singapore's first science-based longevity clinic, Craig offers innovative insights into preventative healthcare that can transform our health and finances.
2. Stein: A well-known YouTuber, Josh covers investment, retirement, health, and property topics, making complex financial concepts easy to understand.
3. Mark Tchaikovsky: As CMO in Singapore and Chief Analytics Officer for Asia at Manulife, Mark provides valuable insights into the insurance landscape and health coverage trends.

The Inflation Elephant in the Room

First things first, let's talk numbers. The current medical inflation rate in Singapore is a whopping 9.5%. Shocking, right?

But before you panic, Mark Tchaikovsky, Chief Marketing Officer at Manulife Singapore, offers some reassurance:

"9.5% is really the spike... If we look at it over the longer term, the rate is much lower."

Still, even a lower rate can significantly impact your retirement plans over time. So, what's driving this inflation? Several factors are at play:

1. An aging population requiring more care
2. Advances in medical technology (which often come with a hefty price tag)
3. Rising wages in the healthcare sector
4. Overall industry growth

The good news? The Singapore government isn't sitting idly by. They're taking proactive measures to help people stay healthier and are expanding public healthcare services to keep costs in check.

Prevention: The Best Medicine (and Investment)

Here's a startling statistic: only 30% of employees take advantage of free annual health screenings. Craig McGee, co-founder of a longevity clinic in Singapore, shares his perspective:

"People are lazy, people are busy, people are worried. But that acceptance and realisation of, I kind of need to know my benchmark... The earlier the better."

The message is clear: we must shift from reactive sick care to preventative healthcare. Early detection and prevention can significantly reduce healthcare costs in the long run. It's not just about saving money but investing in a healthier, happier future.

Action step: Schedule that health screening you've been putting off. Your future self will thank you!

Navigating the Insurance Maze

When it comes to protecting ourselves financially against medical expenses, insurance plays a crucial role. But with so many options, where do we start?

Josh Stein, a finance YouTuber, breaks it down for us:

"The integrated shield plans do very well. So that kind of forms the basics of your medical coverage... essentially it's all your hospital expenses when you visit for treatment. That's the baseline."

From there, you can consider adding critical illness (CI) coverage, including early CI plans. These can provide a financial cushion if you're diagnosed with a serious illness, even in its early stages.

However, there's a significant protection gap in Singapore. Mark Tchaikovsky explains:

"At the moment if we say we need to spend 100 on paying for some treatment or some type of protection or coverage, still there's a shortfall of around 74 for what people are missing out on."

This means many Singaporeans are underinsured, potentially leaving themselves vulnerable to financial stress in case of a medical emergency.

Action step: Review your current insurance coverage. Are there any gaps you need to address?

The Future of Health Insurance: Personalised and Proactive

The insurance landscape is evolving, with some exciting developments on the horizon:

1. Biological age assessments: Insurers may soon use advanced screening to determine premiums based on your "real" age, not just your chronological age.
2. Health tracking partnerships: Some insurance companies are partnering with health tech firms to offer subsidized tracking devices, encouraging healthier lifestyles.
3. Corporate wellness programmes: Forward-thinking companies are investing in support for at-risk employees, potentially reducing healthcare costs for everyone.

Craig McGee shares an exciting vision:

"We determine something called biological age... We think ultimately this should become a barometer for life insurance premiums because if I'm 10 years younger than my chronological age, I'm in theory should be rewarded for that."

Action step: Stay informed about new insurance products and wellness programs offered by your employer or insurer.

Practical Steps to Safeguard Your Retirement

So, how can we protect our retirement savings from the ravages of medical inflation? Here's a summary of key takeaways:

1. Prioritise prevention: Regular health screenings and a healthy lifestyle are your first line of defense.
2. Understand your insurance: Know the difference between integrated shield plans, critical illness coverage, and other types of health insurance.
3. Mind the gap: Assess your current coverage and consider if you need to increase your protection.
4. Stay informed: Keep an eye on emerging trends in health insurance and take advantage of new options as they become available.
5. Start early: The sooner you begin planning and protecting yourself, the better off you'll be in the long run.

Mark Tchaikovsky leaves us with this final thought:

"Don't underestimate the impact of living a healthy life. So, again, getting those biomarkers, more information, starting to take action on those is actually going to be very, very meaningful in the long run."

As the episode came to an end, the panel specialists advised that safeguarding your retirement from medical inflation isn't just about financial planning—it's about investing in your health and well-being today. They continued by reiterating that Singaporeans should take proactive steps now to look forward to a more secure and enjoyable retirement tomorrow.

For more insights on this topic, be sure to check out the full Chills 187 with TFC podcast episode and the Manulife Asia Care Survey 2024. Your retirement dreams are worth protecting—start taking action today!