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Posted on January 31, 2020

Better Health – Greater Wealth

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By John Corron –

As 2020 picks up steam, New Year’s resolution lists are typically at their fullest. Aspirations for better health regularly find their way to the top of major commitments that many plan for in the year ahead.

Many of us know how it feels to have the excitement of sticking to a new, healthier routine slip away as distractions pull our attention away from what we know is best for our minds and bodies.

To stay committed to these goals, triggers must be in place to remind us why they are personally important and desirable in the first place. While finances are not necessarily the most impactful trigger when it comes to striving for better health, it is helpful to understand that there can be serious financial implications for persistent long-term poor health.

Let’s look at the connection between physical wellness and financial health.

Health and Wealth Connection

As you’ll see below, studies have shown that poor health, when compounded over long periods of time, can result in significant disparities in wealth between the most and least healthy segments of society.

It is true that a percentage of the population is forced to deal with chronic hereditary and random medical conditions that are out of their control. For many, however, health can be influenced by habit, consistency and a willingness to make it a personal priority. Small positive changes may compound into significant gains in health, wellness and wealth.

Let’s Look at the Numbers

Quantitative analysis shows this connection between health and wealth over and over. Here are just a few statistics from the research.

The National Bureau of Economic Research estimated that…

  • Median wealth differential at retirement for the healthy vs. unhealthy populations in a recent study was $110,000 ($230,000 vs. $120,000)
  • Healthy workers on average earn more than 28% more than less healthy peers
  • Labor participation is 90% for healthy workers and 70% for least healthy peers

The Integrated Benefits Institute estimated that…

  • Illness and injury cost businesses and the U.S. economy approximately $530 billion annually

Another National Bureau of Economic Research study estimated that…..

  • Total overall medical spending for the highest spending U.S. Medicare recipients was roughly $50,000 versus a mean of roughly $14,120 for all recipients
  • Total out-of-pocket spending for the highest spending Medicare recipients was roughly $26,930 versus a mean of $2,740 for all recipients

The numbers show definitively that health and wealth are connected. Whether it’s absenteeism from work or sheer cost of medical care for an unhealthy person, physical fitness affects financial health.

Financial Implications of Persistent Poor Health

  • Loss of income from absenteeism and lower productivity
  • Higher insurance premiums for life, disability and long-term care insurance
    • In some cases ineligibility of coverage for any of these types of insurance
  • Early death and lower lifetime financial support and savings for families left behind
  • Higher levels of stress
  • Lower levels of motivation

Health habits are learned. Children of unhealthy individuals are more likely to be unhealthy themselves so poor health can perpetuate generationally as well making unhealthy lifestyle cycles harder to break.

A New Year’s Resolution that Pays Off

The pursuit of greater personal confidence, more energy, greater motivation, reduced stress, a more positive mental state and greater odds of living longer can be more powerful factors in choosing to live a healthier lifestyle.

Turning attention toward the link between physical wellness and financial health is another worthy consideration and one that could yield meaningful benefits over a lifetime if we keep it top-of-mind.

Just like any financial commitment, a choice to live a healthier lifestyle compounds with every extra day, month or year that is committed to it. The fact that it could have a meaningful positive impact on a long-term financial plan is icing on the proverbial cake.

Need a financial advisor that help you get financially fit? Get in touch today!

Let’s talk!