Here’s how much being unhealthy will cost you over a lifetime

Being in poor health can cost you big.

People who are unhealthy earn lower incomes, set fewer dollars away in savings, and accumulate less wealth over the years compared to those that are healthy, a new study released by the National Bureau of Economic Research found. The research, conducted by researchers at the University of Georgia and the Federal Reserve Bank of Chicago, found bad health can explain up to 40% of variation in daily spending. Here’s what else it discovered:

  • Healthy People accumulate more wealth over time and bring in more money: They make about 28% more than unhealthy individuals over their lifetime.
  • The Average healthy 65-year-old with high school degree has $230,000 in wealth compared to $120,000 for an unhealthy 65-year-old with a high school degree.
  • Unhealthy people work less: Participation in the labor supply among the healthy is at 90% whilst participation for unhealthy people is 70%

Poor health affects individuals in four ways, the research found: By decreasing productivity, making individuals less useful at work, lowers survival probability, and raises medical spending. Long-term unhealthy people are also less individual and have a lower propensity to save, the study said, affecting long-term goals and financial stability.

“Retirement Savings is one of the first casualties when someone is unemployed or doesn’t have enough income,” said Mark Hamrick, Washington bureau chief for personal-finance site “That can be very detrimental to long term fiscal health.”

This comes as healthcare costs continue to rise for retirees from the U.S.. An American couple retiring in 2017 should anticipate $275,000 in health care costs through retirement, based on financial services company Fidelity Investments, a number that has risen 6 percent since 2016 and is forecast to continue to rise. Costs vary by illness, but 47 percent of breast cancer patients allegedly used their retirement accounts to pay for treatment.

Medical bills are one of the main reasons that push people into bankruptcy. About 21 percent of Americans are not saving any of the income and for people who are, only 25 percent are saving more than 10 percent a month of what they make. What is more, Hamrick noted, America’s obesity epidemic will continue to negatively impact the poor.

“It’s no secret that those who don’t have enough financial means don’t tend to consume too,” he said. He said this leads to obesity, poor health, and more spending on medical costs. “If one isn’t garnering the type of income they need, there’s a mushrooming effect that ends up encompassing everything from health to long-term financial targets.”

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