Finance
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.
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.
“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.”
‘The Big Money Show’ co-hosts discuss buy now, pay later spending options and the impact it will now have on your credit score.
Small, everyday purchases like a meal from DoorDash are now able to be financed through eat now, pay later options — a practice that some experts deem “predatory.”
“You’ve got to have enough sense to not follow the urge to finance a taco, okay? You have got to be an adult,” career coach Ken Coleman told “The Big Money Show,” Wednesday.
“This is predatory, and it’s going to get a lot of people in deep trouble.”
RISKS OF BUY NOW, PAY LATER: ‘TICKET TO OVERSPENDING,’ EXPERT SAYS
DoorDash and Klarna are now partnering up to extend buy now, pay later options to consumers. (Reuters, Getty / Getty Images)
Financial wellness experts are continuously sounding the alarm to cash-strapped consumers, warning them of the devastating impact this financial strategy could have on their credit score as some lenders will begin reporting those loans to credit agencies.
Consumers may risk getting hit with late fees and interest rates, similar to credit cards.
“So your sandwich might show up on your FICO score, especially if you pay for it late,” FOX Business’ Jackie DeAngelis explained.
EXPERTS WARN HIDDEN RISKS OF BUY NOW, PAY LATER
Major players like Affirm, Afterpay, and Klarna have risen to prominence at a time when Americans continue to grapple with persisting inflation, high interest rates and student loan payments, which resumed in October 2023 after a pause due to the COVID-19 pandemic.
Ramsey Solutions personal finance expert and ‘The Ramsey Show’ co-host George Kamel discusses the ‘buy now, pay later’ craze and the trend that celebrates the financial benefits of being childless.
“The Big Money Show” co-host Taylor Riggs offered a different perspective, suggesting that company CEOs have a “duty” to attract as many customers as they want.
“Unfortunately for me, this always comes down to financial literacy — which I know is so much in your heart about training people to save now by later,” she told Coleman, who regularly offers financial advice to callers on “The Ramsey Show.”
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Coleman continued to come to the defense of financially “desperate” consumers, arguing that companies are targeting “immature” customers.
“I’m for American businesses being able to do whatever they want to do under the law. That’s fine. But let’s still call it what it is: it’s predatory, and they know who their customers are,” Coleman concluded, “And I’m telling you, they’re talking about weak-minded, immature, desperate people.”
FOX Business’ Daniella Genovese contributed to this report.
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