With the nature of medical aid premiums being what they are, retirees can realistically expect their healthcare budget line item to consume a gradually increasing portion of their monthly spending as time goes on. Historically, we know that medical aid contributions outstrip consumer inflation by between 3% and 5% each year, without taking into account additional medical expenses that arise as a result of ageing, such as private nursing, assisted living, frail care, and medical devices.
Another big cost driver in retirement is that of treating mental illness, especially depression and anxiety which, according to the London-based Institute of Economic Affairs, increases by about 40% after formal retirement – often as a result of recently retired persons losing their sense of purpose and the social interactions of the workplace.
Another huge healthcare cost driver in retirement is dementia which, being an acquired degenerative brain syndrome, is the leading cause of disability and dependency in the elderly, with age being the single biggest risk factor for developing this disease. Sadly, dementia statistics in South Africa are not accurate although it is estimated that between 20% and 40% of South Africans over age 65 have dementia.
When it comes to caring for a family member who has been diagnosed with dementia, for many the only option is either home-based care or specialised care facilities – with the latter being largely unaffordable. As a result, many families undertake to care for the family member at home – although many completely underestimate the enormity of the task they’re taking on. Having a dementia patient live at home is disruptive and all-consuming and can put emotional strain on the whole family.