Your retirement years should be the golden years of your life, which is why it is critical to make provision for your healthcare expenses so that you can maintain your lifestyle into “your third age”. Sadly, this is often overlooked, making it challenging for most South Africans to access quality healthcare in their retirement years. In 2019, Statistics South Africa (Stats SA) noted that 47 million South Africans are without medical cover.
Farzana Botha, Segment Solutions Manager at Sanlam Savings, explains how people do not realise that providing for medical costs will account for a large chunk of their income in retirement. According to Stats SA, 38% of South Africans over the age of 60 use chronic medication, around a fifth use assistive devices like spectacles, 10% use hearing aids, and 5% use wheelchairs, all of which are not necessarily fully covered if you are on medical aid, and may need to be paid for out of pocket.
Factoring in medical inflation
Medical inflation is 3-5% higher than standard inflation. “This means that the ability to afford your medical aid and related expenses in future will be hampered by the eroding effect of inflation on the buying power of your money,” explains Botha. To afford the same medical care you are accustomed to today in 20 years’ time, you need to budget a larger part of your income towards medical expenses than you do currently.