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Life spans are growing but ‘health spans’ are shrinking

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First, the good news: Americans are living longer than they used to.

Now, the bad news: Older Americans are spending more years in poor health. That dynamic often comes with negative financial consequences, medical and financial experts say.

Since 1960, the average U.S. life span has increased to 77.5 from roughly 70 years old, according to the Centers for Disease Control and Prevention.

But “health spans” are simultaneously shrinking.

A health span is the number of years older people spend in fundamentally good health, said Susan Roberts, a professor of medicine and epidemiology and senior associate dean for foundational research at Dartmouth College.

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Today, the average person spends about 10 years with chronic ailments like diabetes, cancer, arthritis, cardiovascular disease, dementia, cataracts or osteoporosis — roughly double the duration in the 1960s, Roberts said.

As a result, there’s a “widening gap” between one’s life and health spans, she said.

This is because medicine has gotten better at keeping sick people alive, though not necessarily treating them, Roberts said. Obesity, which is an underlying cause of many chronic diseases, is also more widespread, she said. Obesity affects 42% of U.S. adults, according to CDC data released in 2021.

How health impacts wealth

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The concept of a health span is “increasingly important” for a household’s finances, said Stacy Francis, a certified financial planner based in New York and member of CNBC’s Advisor Council.

Adults are spending more time “living a life where they’re not in their best state,” said Francis, president and CEO of Francis Financial. “And it results in significant expenses.”

About 90% of the nation’s $4.5 trillion in annual health care costs are for people with chronic diseases and mental health conditions, according to the CDC.

Medical costs get “worse and worse” once people have a chronic ailment, Roberts said.

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The average 65-year-old retiring this year will spend about $165,000 in out-of-pocket health and medical expenses in retirement, up 5% from 2023, according to Fidelity Investments.

Out-of-pocket treatment costs and early retirements due to poor health are two big ways chronic conditions impact households financially, experts said.

Early retirement might mean claiming Social Security earlier than expected — perhaps resulting in a lower monthly benefit, said Carolyn McClanahan, a physician and CFP based in Jacksonville, Florida.

“A person’s health directly impacts their wealth — and this connection becomes even more acute as people age,” Susan Silberman, senior director of research and evaluation at the National Council on Aging, said in a 2022 briefing.

Of course, this isn’t to say healthy people avoid significant medical expenses.

They may ultimately pay more over the long term relative to an unhealthy individual if they need long-term care, for example, which can be costly and more likely with age, said McClanahan, the founder of Life Planning Partners and a member of CNBC’s Advisor Council.

Plus, healthy people experience more “go-go” years, meaning they can travel and spend on fun things, she said.

Invest in yourself

“When you are in your 40s and 50s, it’s the point of no return,” McClanahan said.

If adults don’t start tending to their health by this age, they become more susceptible to chronic diseases like diabetes and high blood pressure, which can lead to sudden issues like strokes and heart attacks, she said.

Treat purchases of healthy food, gym memberships or exercise classes as an investment in yourself, said Francis. Prioritize the spending on your health and, if it feels like too much money, try to cut back on spending that “doesn’t increase your health span,” she said.

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“I think of that like an investment I put in my 401(k),” Francis said.

“Those extra dollars … will add years to your life and you’ll make up for it,” she said.

More than half of people can reverse a diabetes diagnosis by losing 10% of their weight within the first seven years of that diagnosis, Roberts said.

The “biggest tragedy” of chronic ailments is that “they’re preventable,” Roberts said. A few dietary tweaks — eliminating sugary drinks like soda and juice, and eating small, healthy snacks like an apple — can make a “dramatic difference,” she said.

“Learning to like healthy foods is actually not that difficult,” Roberts said. “Practice it for a couple weeks and be patient with yourself.”

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These are 3 big things we’re watching in the stock market this week

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A security guard works outside the New York Stock Exchange (NYSE) before the Federal Reserve announcement in New York City, U.S., September 18, 2024. 

Andrew Kelly | Reuters

The stock market bounce last week showed once again just how dependent Wall Street has become on the whims of the White House.

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These U.S. consumer stocks face higher China risks

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Apple iPhone assembly in India won’t cushion China tariffs: Moffett

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Street's biggest Apple bear says a production move to India is unrealistic

Leading analyst Craig Moffett suggests any plans to move U.S. iPhone assembly to India is unrealistic.

Moffett, ranked as a top analyst multiple times by Institutional Investor, sent a memo to clients on Friday after the Financial Times reported Apple was aiming to shift production toward India from China by the end of next year.

He’s questioning how a move could bring down costs tied to tariffs because the iPhone components would still be made in China.

“You have a tremendous menu of problems created by tariffs, and moving to India doesn’t solve all the problems. Now granted, it helps to some degree,” the MoffettNathanson partner and senior managing director told CNBC’s “Fast Money” on Friday. “I would question how that’s going to work.”

Moffett contends it’s not so easy to diversify to India — telling clients Apple’s supply chain would still be anchored in China and would likely face resistance.

“The bottom line is a global trade war is a two-front battle, impacting costs and sales. Moving assembly to India might (and we emphasize might) help with the former. The latter may ultimately be the bigger issue,” he wrote to clients.

Moffett cut his Apple price target on Monday to $141 from $184 a share. It implies a 33% drop from Friday’s close. The price target is also the Street low, according to FactSet.

“I don’t think of myself as the biggest Apple bear,” he said. “I think quite highly of Apple. My concern about Apple has been the valuation more than the company.”

Moffett has had a “sell” rating on Apple since Jan. 7. Since then, the company’s shares are down about 14%.

“None of this is because Apple is a bad company. They still have a great balance sheet [and] a great consumer franchise,” he said. “It’s just the reality of there are no good answers when you are a product company, and your products are going to be significantly tariffed, and you’re heading into a market that is likely to have at least some deceleration in consumer demand because of the macro economy.”

Moffett notes Apple also isn’t getting help from its carriers to cushion the blow of tariffs.

“You also have the demand destruction that’s created by potentially higher prices. Remember, you had AT&T, Verizon and T. Mobile all this week come out and say we’re not going to underwrite the additional cost of tariff [on] handsets,” he added. “The consumer is going to have to pay for that. So, you’re going to have some demand destruction that’s going to show up in even longer holding periods and slower upgrade rates — all of which probably trims estimates next year’s consensus.”

According to Moffett, the backlash against Apple in China over U.S. tariffs will also hurt iPhone sales.

“It’s a very real problem,” Moffett said. “Volumes are really going to the Huaweis and the Vivos and the local competitors in China rather than to Apple.”

Apple stock is coming off a winning week — up more than 6%. It comes ahead of the iPhone maker’s quarterly earnings report due next Thursday after the market close.

To get more personalized investment strategies, join us for our next “Fast Money” Live event on Thursday, June 5, at the Nasdaq in Times Square.

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