Some Expenses Increase with Retirement

When considering retirement, many clients wisely consult with their financial advisors to ensure they have sufficient means to stop working.  Some, however, do not, or make the mistake of assuming their ability to retire based upon their current expenses.  However, they fail to consider just how much some expenses will increase.

U.S. households led by an individual who is 65 or older spend an average of $7,030 a year on health care, according to the Bureau of Labor Statistics’ latest data on consumer spending, which is for 2021.

Money Talks News’ recent article entitled “How Much Retirees Actually Spend on Health Care in the U.S.” says this translates to about 13% of the total spent each year by senior households ($52,141) and makes health care the second-largest spending category among those households. Only housing accounted for a bigger share of seniors’ spending in 2021. By comparison, all U.S. households spend an average of $5,452 a year on health care, which translates to about 8% of spending across all households ($66,928).

Here’s a detailed look at how senior households’ medical spending breaks down.

Health insurance. The average spending for a U.S. household led by someone age 65 or older is $4,974 per year. By comparison, the average spending across all U.S. households is $3,704 per year. Insurance is without a doubt the biggest health care expense for households of any age, but it’s highest for senior households. They spend $4,974 — around $415 a month — on insurance on average—roughly 10% of their total spending.

Medical services. The average spending for a U.S. household led by someone age 65 or older is $1,077 per year, compared to the average spending across all U.S. households at $1,070 per year. This type of health care expense includes a wide variety of care, such as:

  • Hospital room and services
  • Healthcare professionals
  • Eye and dental care
  • Lab tests and X-rays
  • Medical care in a retirement facility; and
  • Care in a convalescent or nursing home.

Drugs. The average spending for a U.S. household led by someone age 65 or older on medications is $726 per year, as opposed to $498 per year for the average spending across all U.S. households. This includes spending on prescription and nonprescription medications, as well as vitamins.

Medical supplies. The average spending by a U.S. household led by someone age 65 or older is $253 per year. The average spending across all U.S. households is $181 per year. This type of spending covers:

  • Various supplies, such as dressings, antiseptics, bandages, first aid kits, syringes, ice bags, thermometers and heating pads
  • Medical appliances, like braces, canes, crutches, walkers, eyeglasses and hearing aids; and
  • Rental and repair of medical equipment.

Housing.  Very rarely does a client tell me they don’t want to live in their home.  However, we all have to consider an increase in housing expenses if health won’t let us live at home.  The average costs of a nursing home in the Houston areas is less than $6,000.  Several of the places you’d prefer to live at are in the $7,000 to $10,000 range.  When I practiced in upstate New York it wasn’t uncommon to deal with nursing homes that cost $12,000 or more.  Many clients fail to consider these costs, which is why we end up discussing Medicaid for these costs.

If you are interested in this topic, you can see here for more:  https://galligan-law.com/elder-law-questions/  

Additionally, clients assume they can live at home with the aid of a professional care giver.  If health is such a concerned you need to be under the supervision of a doctor, then this won’t cover it.  Even if it does, and many people use this for a limited time, the cost isn’t much less.  Most services will cost between $20-25 an hour easily.  Let’s assume you only need 8 hours of care at that rate.  Assuming 30 days a month and $20 an hour, you are talking about $4,800.  Most people using this service need more hours.  In short, the cost is there regardless.

Reference: Money Talks News (Oct. 25, 2022) “How Much Retirees Actually Spend on Health Care in the U.S.”

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Can Artificial Intelligence (AI) Detect Dementia?

Doctors are beginning to apply artificial intelligence (AI) to detect and diagnose neurological diseases such as dementia.

Using artificial intelligence (AI), researchers at Boston University School of Medicine designed multiple computer models that used patient data to identify disease-specific signatures.  Essentially, they want to use AI to detect dementia and other similar diseases.

Yahoo News’ recent article entitled “AI may detect dementia just as well as doctors: study” says that from these signatures, the AI was able to discern which patients had normal cognition, mild cognitive impairment, Alzheimer’s disease and non-Alzheimer’s disease dementia.

The findings were published in the journal Nature Communications.

“Even in circumstances where a specialized neurologist or neuro-radiologist is too busy to directly provide a diagnosis, it is foreseeable that some degree of automation could step in to help, thereby enabling doctors and their patients to plan treatment accordingly,” said co-author Vijaya B. Kolachalama in a statement.

Past research showed that artificial intelligence is capable of discerning between absence and presence of a disease. The models developed were able to identify certain signals based on dementia related changes in MRI scans. The signals were then found to be associated with brain regions with microscopic evidence of degenerative tissue changes.

The researchers noted this unique capability much more closely mirrors real-world scenarios, since the computer focused on the source of the patient’s illness despite multiple possibilities. Dementia, or chronic alterations in one’s mental status, can be a hallmark of Parkinson’s disease, geriatric depression, or nutritional deficiency as opposed to just Alzheimer’s disease, Kolachalama explained.

“Our study is novel because, unlike work before it, we demonstrate a computational strategy for providing an accurate diagnosis during this diverse landscape of neurologic disease,” he said.

Patient data fed into the algorithms included results of functional testing, demographics, medical history and MRI scans, all of which can be collected during routine doctors’ visits. When compared with diagnoses made by neurologists and neuroradiologists, the researchers’ models met those of the experts. They now plan to conduct further research, including a prospective observational study in memory clinics to better compare the algorithm’s performance with that of clinicians.

“If confirmed in such a head-to-head comparison, our approach has the potential to expand the scope of machine learning for [Alzheimer’s disease] detection and management, and ultimately serve as an assistive screening tool for healthcare practitioners,” they wrote.

If this topic or other topics on senior health interest you, you can find more blogs on these topics at https://galligan-law.com/category/senior-health/.

Reference: Yahoo News (June 21, 2022) “AI may detect dementia just as well as doctors: study”

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Golfing May Reduce the Risk of Dementia

Leisure-time exercises like golfing may reduce the risk of dementia for older men according to a recent study.

Depending on who is reading this, you are either going to be thrilled with me, or angry at me for giving an excuse to someone.  But, we here at The Galligan Law Firm value the health of our clients, and with that, I want to share the results of this important study.

Older men now have a great excuse to spend more timing golfing.  A recent study suggests playing golf may cut the risk of getting dementia according to The Daily Mail’s recent article entitled, “Playing GOLF could cut your risk of getting dementia by a third, study claims.”

Men 60 years and older who regularly exercise at a ‘leisurely’ pace, such as golf, were up to 37% less likely to be diagnosed with the disorder, a Japanese study found. Experts say this may be due to the quick mental calculations done when lining up a putt or avoiding a bunker which may help prevent cognitive decline. Researchers also say the social aspect of playing golf with others may help stave off dementia, in addition to the benefits of physical exercise. However, this effect was not found for women who played more games of golf or other similar activities, like tennis or gardening.

Previous research has suggested factors like social isolation also increase the chances of getting dementia, with a lack of personal interaction with others a key risk factor. I’ve read other studies which examined towns with an abnormal number of individuals who reach 100 years of age.  Those studies similarly found that social interaction in those towns (small, tight-knit communities) encouraged long-term health.

In this study, researchers at the Center for Public Health Sciences in Tokyo reviewed survey data collected between 2000 to 2003 from 43,896 Japanese seniors. On average, they were aged 61. The survey participants were asked to detail their average levels of daily activity. Each activity was given a score, based on the energy expended doing a task. These scores were then compared to dementia diagnoses logged between 2006 and 2016.

A total of 5,010 participants were diagnosed with the condition during this time frame. The results showed no clear link between moderate to vigorous exercise and any reduced risk of dementia. However, further analysis of the same set of data showed men who did lots of ‘leisure-time’ exercise were at less risk of the disorder. Men in the top 25%— in terms of the amount of leisure-time exercise they carried out — were 37% less likely to have dementia three years after being surveyed. This risk reduction remained even after other risk factors like smoking status, alcohol intake and BMI were taken into account. Nine years after being surveyed, the more active men were 28% less likely to have a dementia diagnosis, compared to the least active.

Lead author Dr. Norie Sawada suggested leisure activities, like golf, may help older man stave off dementia through both the mental calculations required to play and the social aspect.  It is encouraging too that an active lifestyle (“leisure-time exercise”) can help without requiring extreme or vigorous exercise as we age.

Dr. Sawada also noted that ‘the social activity that accompanies leisure time physical activities, such as participation in golf competitions and enrollment in tennis circles, also has a protective association against cognitive decline and dementia.’

There is no precise way to prevent dementia. However, experts say that maintaining a healthy heart through regular exercise and eating healthy foods helps reduce the risk of the condition, and if golfing helps, so be it.

As to why women in the study did not enjoy a reduced dementia risk, Sawada thinks that they may already be getting similar benefits from their everyday activities, compared to men.

So, if there is one thing you do to help your health this weekend, let it be golfing!

Reference: Daily Mail (March 29, 2022) “Playing GOLF could cut your risk of getting dementia by a third, study claims”

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