It no longer surprises me when I work with a patient to help them figure out how to pay for their treatments for cancer. Understanding that the costs of cancer treatment are so expensive and impact your entire financial life, and it goes to say that more people with cancer experience financial toxicity far more frequently than people suffering from most other illnesses. Unfortunately, our educational systems do not educate us from an early age about budgeting, the value of money, and the importance of understanding our healthcare system and insurance options. As well as planning for our financial futures.
Financial woes are being exacerbated due to COVID-19 with the loss of jobs, and people forced into retirement as the result of personal health or caregiving responsibilities for family members. The loss of employment is leaving many seniors financially vulnerable resulting in the lack of continued saving for retirement, and, consequently extending the time in retirement. Those who left the workforce early due to health may now be saddled with increased credit card debt and additional medical expenses.
According to the National Retirement Risk Index created by the Center of Retirement Research at Boston College, nearly 51% of all U.S. households can’t maintain their pre-retirement standard of living throughout retirement even if they continue to work until age 65, saving in retirement accounts all the while and tapping into all financial assets, including home equity via a reverse mortgage.
Only 3 in 10 retirees retired when they planned and of those who did not retire when planned, 59% reported retiring earlier. Many said they were forced into retirement because of health issues (65%), job loss (22%), or because they had family caregiving responsibilities.
It is worth noting that the pandemic left many older and ill persons very concerned about their health, especially in the workforce. As a result, many are going into debt with excessive credit card debt extended to pay for necessities such as groceries, housing, and increased insurance costs. Retirees more than doubled their debt in 2020 and it will probably be even higher in 2021.
Fully 60% of retiree household wealth is derived from social security benefits as more and more employers moved away from pension plans since 2008. With more retirees needing to pick up full or part-time work to supplement social security income in a volatile economic environment, many are left struggling to make ends meet.
Even in a strong economy, very few people take advantage of the expertise of a financial advisor to help them plan their retirement. A good advisor will help uncover weaknesses in their financial futures including tax liabilities, increased healthcare cost, and inflation.
One would say it is prudent to seek out the advice of a professional that can help you anticipate and overcome financial challenges. It isn’t necessary to have a lot of money as many would think to seek out professional financial help. In fact, you could argue that midrange income earners could use their help even more urgently as they have more to lose comparably to high-income earners.
This last year has shown us how vulnerable our financial lives can be. Now take the steps to put your financial future on solid ground and prevent the epidemic of financial toxicity.
Editors note* this is part one of a series of articles on this topic. The next article will focus on how to find a financial advisor/planner.
about the author
Diahanna is the Financial Program Manager for the HealthTree Foundation. She specializes in providing financial help, resources and education for multiple myeloma patients. As a professional financial consultant and former caregiver of her husband who was diagnosed with multiple myeloma, Diahanna perfectly understands the financial issues facing myeloma patients.