loader image

The Healthcare Hurdle: Is It Truly Possible to Achieve Financial Independence?

Picture of Randall E. White

Randall E. White


Do you dream of the day when work becomes an option, rather than a necessity? If so, you’re not alone. Many Americans in their thirties, forties, and fifties are working hard to save and invest with the hope of achieving financial independence and leaving the working world behind. This is no small feat, what with concerns like boomerang children, inflation, college costs and caring for aging parents. It’s health care costs, however, that act as the biggest hurdle.

Recent Data

A study by Fidelity has shown that the average couple retiring this year at age 65 will spend approximately $280,000 on healthcare during retirement. This is more than the majority of working Americans have saved for retirement in total, and it doesn’t include potential long-term care expenses. So, it’s no wonder that TD Ameritrade’s annual survey found that 57 percent of Americans are more concerned about healthcare than any other costs in retirement.

The same survey indicated that good health is actually a driver of financial freedom. In fact, 72 percent of respondents who identified as financially independent said that health was the key motivator in retiring early. After all, no work responsibilities often translate to less stress and greater overall wellness. No amount of money can guarantee perfect health, of course, but becoming financially independent also increases the odds that you’ll practice self-care, including getting regular check-ups and screenings and following up on any health concerns that arise.

The TD Ameritrade survey also elicited some surprising responses from those nearing retirement. When asked how they hoped to spend their days of leisure, 64 percent answered that they would spend more time with loved ones and 62 percent intended to travel. While these responses aren’t surprising, a full 57 percent of respondents said they planned to spend much of their time in retirement-focused on holistic wellness. In fact, this was the third most popular response. It makes sense, though, given that no one wants to achieve financial independence and retire only to spend years in a hospital bed or nursing home.


About three-fourths of retirees plan to rely on Medicare for their healthcare needs once they reach age 65. However, Medicare will not cover all needed expenses, especially if long-term care becomes necessary. This means that planning to be financially independent means having the ability to pay for health insurance, supplemental insurance or long-term care, too.

For those planning to retire before age 65, it’s integral to determine how you’ll pay all your health expenses before you become eligible for Medicare. It can cost thousands per year, especially if you’re also insuring a spouse or children. If you’ll be in this scenario, you’ll likely need to rely on health insurance plans available through the federal government’s Affordable Care Act marketplace.

Not everyone aspires to financial freedom or early retirement – or any retirement at all. Some people love their work and plan to continue with no end in sight. However, if you do hope to achieve financial independence and enjoy a lifestyle where work is an option instead of a necessity, make sure you factor in healthcare costs as you plan.

Securities offered through Triad Advisors, LLC, member FINRA/SPIC. Advisory services offered through TriCapital Wealth Management, Inc. TriCapital Wealth Management, Inc. is not affiliated with Triad Advisors, LLC.

Join Our Mailing List

Take control of your financial future and stay one step ahead with our valuable resources. Sign up today and start your journey towards financial success.