Health and Wealth: The Importance for Lifestyle Medicine

Abstract

Many people spend years dreaming about their retirement. Unfortunately, today’s workers will likely work longer, suffer greater economic uncertainty, and might have poorer health status compared with retirees in previous generations. Preserving good health during the working years is associated with a more consistent employment record, greater financial resources, and reduced risk of disease. Making smart financial decisions as a younger adult also translates to improved finances in retirement. While many people are aware of these relationships, many continue to make poor health choices. Employers and lifestyle medicine professionals can both work to improve financial well-being in retirement. Employers can offer effective worksite financial wellness programs and promote participation in retirement savings programs. Physicians and other health providers can foster healthy behaviors, encourage preventive services compliance, and help adults foster overall financial and health well-being. Adopting a healthy lifestyle as early as possible would increase the likelihood that today’s workers will enjoy financial security in retirement.

When health is absent, wisdom cannot reveal itself, art cannot become manifest, strength cannot be exerted, wealth is useless, and reason is powerless.

—Herophilus, ancient Greek physician

. . . about one-half of retirees have no retirement savings, and the median savings for near-retirees (age 55-64 years) is only about $12 000.

Introduction: Changes in Retirement

Advances in medicine, technology, and well-being have resulted in greater longevity in the United States and therefore the need to plan for a retirement that could be many years longer than seen in previous generations. ¹ According to SoFi.com, the average American retires at age 64. ² Since today’s average life expectancy is 79 years, ³ most people will spend about 15 years in retirement. While Social Security data show that most Americans claim retiree benefits as soon as they are eligible, ⁴ current workers in the Baby Boom generation expect to work longer than earlier cohorts of workers. ⁵

Unfortunately, about one-half of retirees have no retirement savings, and the median savings for near-retirees (age 55-64 years) is only about $12 000. As of 2017, half of private sector employees had access to employer-based retirement benefits—either defined benefit pension-style plans or defined contribution 401(k) types of plans—which has been at a consistent rate since 1979. ⁶ However, only 52% of households with a head of household or spouse age 25 to 64 years old participate in an employer-based retirement plan when one is available to them. ⁷ Ethnic and racial wealth disparities were exacerbated in the Great Recession of 2007 to 2009, ⁸ and the COVID-19 pandemic has resulted in the highest level of unemployment in the United States since data collection began in 1948. ⁹

The prevalence of having multiple (2 or more) chronic conditions from the 2018 National Health Interview Survey for US adults with private health insurance coverage was 15.7% for 18- to 64-year-olds, while the prevalence for those individuals age 65 and older was 63.2%. The chronic diseases included in that survey were arthritis, cancer, chronic obstructive disease, coronary heart disease, asthma, diabetes, hepatitis, hypertension, stroke, and weak or failing kidneys. ¹⁰

At this time, approximately 10 000 baby boomers turn age 65 each day, with that trend expected to continue for many years. ¹¹ Whether or not a person has enough savings is a key factor in the decision to retire. ¹² Another major factor is whether or not a person is healthy enough to continue working if they do not have enough savings to retire. To shed light on that topic, the purpose of this review is to identify the relationship between health and finances in employed adults nearing retirement age.

Employee Health and Wealth

Employers have long supported worksite wellness programs to promote employee health. Goals typically include managing health care costs, disability, and worker productivity. Although there are altruistic motives for instituting these programs, a chief goal has often been health care cost control. ¹³ These wellness programs have resulted in healthier employees who may or may not live longer, but who likely will have more productive years of life.^14-17 Numerous studies have established the link between health risks measured by a health risk appraisal and economic outcome measurements such as health care costs, pharmacy costs, and productivity costs.^18-22 Similarly, research has documented the links between multiple health indicators and employee income over time. ²³

Employees who participate in employer-based wellness programs are likely to be healthier in their retirement years and therefore will need additional retirement savings to continue their active lifestyle. In contrast, employees who have medical conditions or health risk factors placing them at increased risk of disease in retirement will likely need additional retirement benefits to cover their medical expenditures. A Kaiser Foundation study found that in 2012 an estimated 1 in 3 Americans had difficulty paying their medical bills within the past year. They were paying previous bills over time or were unable to pay their medical bills at all. ²⁴ A majority of these people who had trouble paying medical bills had health insurance but had out-of-pocket expenses for health care not covered by their insurance or cost-sharing expenses for insurance deductibles and co-payments. For all people, financial resources are critical to the quality of the retirement years.

A review of the literature found very little published research on the association between health and retirement saving contributions. Gubler and Pierce reported on 401(k) contributions by 414 employees working in 8 multistate laundry locations. They found that the decision to contribute to a 401(k) retirement plan predicted whether an employee who had a basic health risk appraisal and 42 blood screening tests acted to correct their poor physical health risks in the following year. ²⁵ In that study, participants received a financial incentive of an approximately 15% decrease in their health insurance premiums depending on their base salary ($1.75 to $11 per month) to complete a health risk appraisal. Furthermore, they found that employees who contributed to their 401(k) were 27% more likely to show improvements in their health risks and biometric abnormalities than noncontributors in the following year. A total of 208 out of 213 (98%) of these employees with 2 screenings in 2010 and 2012 had at least one abnormality and 53/213 (25%) had at least one “severely abnormal” finding. The only intervention for the abnormalities was referring the employee to their doctor for follow-up, which points to the importance of a strong ongoing relationship between aging workers and their primary care physician.

Brown et al found that households approaching retirement in recent years held significantly more debt than households nearing retirement in the previous decades. ²⁶ This result was also found by Lusardi et al, who analyzed data from the long-term Health and Retirement Study as well as the National Financial Capability Study. They concluded that people approaching retirement now hold more debt and suffered more financial insecurity than past generations. ²⁷ A 2016 study found that the health of Americans aged 50 to 70 had not improved over the past 2 decades, ²⁸ with other studies showing that the health of adults in that age category may have actually worsened during that time period.^29,30

Changes in Social Security over the past 50 years have increased the “normal” retirement age.^31,32 Therefore, upcoming retirees will retire and claim benefits at a later age than previous cohorts, despite the fact that their health is worse according to several measures. The consequences of this combination of factors may lead to other outcomes such as an increase in people applying for Social Security disability benefits, or an increase in health care costs for employers whose employees are working until later ages. ³³

It is known that postretirement medical expenditures are related to health. A Medicare population was asked to respond to the following question: “In general, compared to other people your age, would you say your health is: excellent, very good, good, fair or poor?” Responses were the following: 18% as excellent, 26% as very good, 30% as good, 17% as fair, and 7% as poor. Medicare expenditures had a marked inverse relationship to self-assessed health ratings. In the year after assessment, age- and gender-adjusted annual expenditures varied 5-fold, from $8743 for beneficiaries rating their health as poor to $1656 for beneficiaries rating their health as excellent. Hospitalization rates followed the same pattern: respondents who rated their health as poor had 675 hospitalizations per 1000 beneficiaries per year compared with 135 per 1000 for those rating their health as excellent. ³⁴

Health and wealth are both important resources for living a happy and successful life. People in poor health often die young and spend thousands of dollars for medical care that could have been invested for retirement. On the other hand, those who practice recommended health behaviors are more likely to exceed average life expectancy and need a larger nest egg to ensure that they do not outlive their assets. Health and personal finances are both closely associated with happiness. Research suggests that 4 factors strongly predict happiness and well-being in most cultures: health, financial stability, work, and other productive pursuits, and family and friend relationships.^35-37 This concept was reiterated in a 2017 study of retirees and the changing nature of retirement with many individuals choosing or having to work after the traditional retirement age. The most influential resources related to retirement outcomes in that study were financial resources, health, and, in some cases, social networks. ³⁸ Studies indicate that people are happier when they are healthy, employed, or doing something productive; have strong social relationships; and are financially secure. Costly health incidents can deplete a household’s savings, leaving them vulnerable. ³⁹ Happiness has been associated with longevity. ⁴⁰ For example, very happy people have a 6% lower risk of death over a given follow-up time period than people who are pretty happy, and 14% lower risk of death than those who are not happy.

There is abundant literature reporting that a reduction in health risk factors is associated with less short-term disability, absenteeism, improvement in on-the-job productivity (“presenteeism”), and lower health care cost expenditures.^41-43 Of equal importance is whether changing health risk factors in older adults results in changes in these metrics. The percentage of people in the United States who work and people who want to work has increased markedly in both the 65 and older and 75 and older age groups according to the American Association of Retired Persons Public Policy Institute. ⁴⁴ The workforce participation rate for 65 to 74 was 17.5% in 1996 compared with 26.8% in 2016. For 75 and older, the rate jumped from 4.7% in 1996 to 8.4% in 2016. ⁴⁵ An April 2013 Gallup survey had similar findings. A total of 1005 nonretired, working people were asked when they reached retirement age “will you continue working and work full-time; continue working part-time; or stop working altogether?” ⁴⁶

• 15% said they would work full-time, and 40% of those said it was because they wanted to, not because they must.

• 61% said they would work part-time; almost 55% of those said they would do it because they wanted to.

• 22% said they would retire and stop working altogether.

The current average retirement age for men and women is 64 and 62, respectively, while current workers report they anticipate retiring at age 67. ⁴⁷

What Can Employers Do?

The need for health care benefits is one of the factors that workers between the ages of 50 and 65 have cited most frequently when asked to identify major reasons to work in retirement. ⁴⁸ This suggests that access to employer-sponsored health insurance benefits may be used by organizations to retain skilled and experienced workers. To address this employee need, some employers may offer health insurance to employees who work part-time. Employers that can provide these options to employees with increased longevity will be addressing an essential need of the skilled worker in the coming years.

We believe that incorporating health metrics into retirement planning earlier in life might have a favorable impact on employee retirement saving contributions. ⁴⁹ In economics, the concept of time preference is the current relative value placed on some item today compared to receiving it at a later date. That is the trade-off that employees need to consider when choosing to save for retirement as well as make healthy choices today. Researchers attempt to capture this difference in today versus later value as “time discounting” because individuals choose to forego future wealth or health in favor of immediate consumption or suboptimal choices. ⁵⁰ There are benefits to employers as well. According to Towers Watson’s 2012-2013 Global Workforce Study, “Employers that successfully invest in supporting both employee health and employee confidence in their financial well-being drive a surprising high return on investment for all stakeholders.” ⁵¹

Some employers may choose to implement flexible or phased retirement policies, which allow aging workers to transition to part-time work or shared jobs as they approach retirement. In a simulation study, a model was created in which workers knew about their future health condition (based on personal, family history, and community risks) when they were young, and adjusted their savings accordingly to improve their future financial situation. The simulation allowed for flexible or phased retirement that helped minimize the need for welfare programs for the future retirees. ⁵² A 2017 analysis of the Health and Retirement Study data found that more than half of older Americans were utilizing some combination of 3 strategies for their retirement including changing employers later in life, reentering the labor force after an initial retirement, or reducing their hours in career employment after traditional retirement age. ⁵³ The authors noted that this flexibility is beneficial to many workers but that it also reflects the hardship endured by some retirees in poor health or with insufficient financial resources.

Employers who contribute to the health care costs of their retirees may also consider offering a health promotion program for that population. In 1992, Bank of America randomized 5686 of its retirees into a full health promotion program, questionnaire-only, or control groups to determine if the program had any impact on health habits, risks, or utilization. ⁵⁴ After 1 year of follow-up health risk scores and health care costs decreased significantly in the program group compared with the other 2 groups. There are also altruistic reasons for providing a wellness program to employees who retire, which may attract motivated workers to companies. Similarly, General Motors also offered a wellness program to its retirees in 1996 in an effort to improve health status and contain health care costs in that population. ⁵⁵

The Health and Retirement Survey data show that financial literacy is common among retired individuals, who often rely on professional financial planners, retirement seminars, and financial calculators. However, results show that younger adults are not as well informed. ⁵⁶ It is not clear why so many people fail to plan for retirement at a young age but some of the suggested reasons include low salaries, and burdensome student loan debt, no access to an employer-sponsored retirement savings program, parenthood, and homeownership financial strain. Employers can improve the situation by sponsoring workplace seminars on retirement planning and encouraging participation in 401(k) plans with matches or other strategies. Incorporating health metrics into retirement planning sessions earlier in life may have a favorable impact on employee retirement savings contributions as well. ⁵⁷

What Can Lifestyle Medicine Practitioners Do?

A study in the United Kingdom attempted to identify common health problems that forced older workers into retirement due to poor health. The study found that older workers who reported depressive symptoms or impaired physical mobility were at increased risk of making an early transition out of work. ⁵⁸ Lifestyle medicine practitioners targeting these conditions may enable older workers to remain in the workforce until they have reached full retirement age. Encouraging healthy lifestyle behaviors is another way lifestyle medicine physicians can improve older adults’ lives. A UK study of older adults found that physical activity tends to decrease around age 55, which has a detrimental impact on health and well-being in retirement. ⁵⁹ Activity with a social component may be the key to keeping that age group active.

Encouraging positive behaviors after retirement is another important way for lifestyle medicine to impact this population. A large population-based cohort study in Australia found that retirement was associated with positive lifestyle changes such as quitting smoking, increases in physical activity, reductions in time spent sitting, and improved sleep. ⁶⁰ A large corporation using a population-based study in the United States offered wellness programs to all active and retired employees in one area of the country. Participation rates were monitored anonymously over 4 years. It was found that retirees who participated in the wellness program activities during their employment also had higher participation rates as retirees. ⁶¹ Health professionals may wish to capitalize on this time of major transition to focus on healthy choices and behaviors.

Conclusions

Retirement is something that most people spend a significant amount of time thinking about. Unfortunately, the reality of retirement may not match each person’s dreams. The research summarized in this article reveals that today’s workers will have to work longer, have more economic uncertainty, and have poorer health measures compared with retirees of previous generations. Maintaining good health during the adult years is associated with a more stable employment history, more financial reserves, and reduced risk of disease. Making wise financial decisions as a younger adult also translates to improved finances in the retirement years. Even though most people are aware of these relationships, many people still choose to make poor health choices such as smoking, living a sedentary lifestyle, and eating a poor diet, as well as less than ideal financial choices such as incurring large amounts of debt, outspending their income, and not saving for retirement. Employers and lifestyle medicine professionals can both contribute to improvements in this situation. Employers can encourage participation in worksite wellness programs and participation in 401(k) savings programs. Physicians and other health providers can foster healthy behaviors, preventive service compliance, and community support for individuals. Implementing those changes as early as possible would increase the likelihood of adults being able to enjoy a long and healthy retirement.