Written on July 14, 2022
Prepare for medical expenses

As you get older medical expenses tend to get higher. You may not feel the pinch now if your employer covers your medical bills or if you are covering the bills using proceeds from your various businesses. This pinch will be felt when sources of income are constrained during retirement.

It is never too early to start thinking broadly about your retirement especially when it comes to your health. Whether you have just started your career, or close to retirement, it is important that you understand and start planning for the inevitable possibility of increased medical costs when you get older.

Create a cash cushion

Rising health care costs and unforeseen illness can disrupt even the most elaborate retirement plan. It is therefore important to maintain a solid medical insurance scheme. In the case of Ndalamas, they are advised that setting aside liquid investments within their retirement plan, solely dedicated to their future medical expenses, will benefit them. This will act as a cushion should there be any huge bill that they will need to take care of at the time.

A provision for medical costs should be prioritized as one of the most important aspects of a good retirement plan. Unfortunately, medical expenses typically increase with age as is the circle of life.

In a Malawian context, as the healthcare system gradually progresses, people with advanced illnesses or medical conditions may opt to seek treatment abroad and incur a variety of unplanned costs like air tickets, accommodation, and other travel expenses. Similarly, medical treatment locally may be needed from highly specialized private medical personnel which may be primarily expensive.

The Ndalamas are advised to have medical expenses as a part of their retirement plan, creating a solid back-up plan for any illness. This will keep them covered long after they are no longer employed and possibly with no one but them to cover their medical expenses. Some of the factors to consider as they make this plan are their health status, available health covers, retirement age, retirement location and their income.

Cut down on expenses

As you go into retirement, it is important to cut down to certain expenses to ensure your retirement funds sustain you. This means dropping or cutting down all unnecessary expenses. In this case Pemphero and his family can choose to revise different aspects of their lifestyle for example, change the frequency of family outings , opt for a low maintenance vehicle and so forth. Preparing for an enjoyable retirement does not mean they entirely give up on their fun family activities.  At the center of all investment success is mastering the art of compromise. The Ndalamas therefore have extra cash that will go toward their medical bill expenses.

This means they examine some of their spending habits and see how best to maintain an enjoyable life they can manage now while preparing for the future.

With that said, it has been an amazing 6 weeks of sharing my take-aways from the retirement seminar by NICO Group last year. The advice from Mr. Lipunga and lessons learned from the Ndalama’s chats with their advisor has made it clear that it is never too early to prepare for an enjoyable retirement.

Remember that you want a relaxed and enjoyable retirement, not a stressful one, and NICO Asset Managers is prepared to guide you in the right direction. If you missed any of the articles, visit the NICO Asset Managers website below and do not hesitate to contact them for more.

For more information, contact NICO Asset Managers on:

Call Centre: 323

Email: invest@nicoassetmanagers.com

Website: https://nicoassetmanagers.com

Follow us on LinkedIn: NICO Group Malawi

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