Prioritizing Your Health Can Improve Your 401k
When we talk about financial planning, the first thing that comes to mind is savings. However, there is one thing that people tend to overlook which can greatly affect their financials in the long run – their health. Your physical and mental well-being can impact your financial stability in ways that you might not be aware of. In this article, we’ll explore why prioritizing your health can improve your 401k plan.
Healthcare Costs
Healthcare is expensive and can take a significant chunk out of your savings. By prioritizing your health, you can avoid pricey medical bills, expensive medications, and unexpected emergencies that can drain your 401k. A study by the Employee Benefit Research Institute (EBRI) found that a 65-year-old couple retiring in 2019 can expect to spend $285,000 in healthcare expenses throughout their retirement. That’s a staggering amount that can eat into your retirement savings if you’re not prepared for it.
Increase in Productivity
When we neglect our health, it not only affects us physically but also mentally. We become less productive, which can impact our income. Taking care of ourselves through regular exercise, healthy eating, and reducing stress can increase our productivity at work, leading to better job performance and salary growth. A study by the National Bureau of Economic Research (NBER) found that regular exercise can lead to 5-7% higher earnings compared to those who do not exercise regularly. That’s a significant increase that can compound over time and improve your 401k balance.
Longevity
It’s no surprise that taking care of our health leads to a longer life. Living longer means you’ll need to have more money saved up to sustain your lifestyle in retirement. Taking simple steps like reducing your alcohol intake, quitting smoking, and staying active can help increase your life expectancy. According to the Centers for Disease Control and Prevention (CDC), the life expectancy in the US is currently 78 years. By taking care of your health, you can increase your life expectancy and give yourself more time to save up for retirement.
Tax Benefits
The government incentivizes individuals to prioritize their health by providing tax benefits for certain medical expenses. By using a Health Savings Account (HSA) or a Flexible Spending Account (FSA), you can save money on medical expenses while taking advantage of tax benefits. These accounts can help you reduce your taxable income and increase your take-home pay.
Conclusion
Prioritizing your health can have a significant impact on your financials in the long run. By avoiding costly medical bills, increasing productivity, living longer, and taking advantage of tax benefits, you can improve your 401k and set yourself up for a comfortable retirement. Investing in yourself through healthy habits and preventative medicine is a smart way to secure your financial future.
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