When I was growing up, my parents would always remind me, “Health is wealth.” Back then, I thought it was just one of those sayings meant to get me to eat more vegetables or sleep earlier. But as I got older—and especially after I started working in financial planning—I began to realise how true those words are.
You see, it doesn’t matter how much you’ve saved or how well you’ve invested. If your health fails and you’re hit with unexpected medical bills, it can wipe out everything you’ve worked so hard to build. And in Singapore, where healthcare costs are rising year by year, this is a reality many of us can’t afford to ignore.
If you’re planning for retirement, you might already be thinking about how much you need for daily expenses, housing, and maybe a bit of travel. But have you really accounted for healthcare costs? Because if you haven’t, that could be the biggest blind spot in your retirement plan. Let’s talk about why—and how—you can protect yourself.
The Rising Cost of Healthcare in Singapore
Singapore’s healthcare system is world-class, but quality comes at a price. Even with subsidies and schemes like MediShield Life, the cost of medical care can add up quickly, especially as we age.
Here’s the reality:
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Chronic illnesses are common. Conditions like diabetes, high blood pressure, and heart disease become more likely as we get older, and managing them isn’t cheap.
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Medical inflation is real. Healthcare costs in Singapore have been rising faster than regular inflation. According to the Ministry of Health, medical inflation averages around 10% per year.
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Longer life expectancy means higher costs. Singaporeans are living longer, which is great! But it also means we’ll likely spend more years dealing with age-related health issues.
And let’s not forget about unexpected events—emergencies, surgeries, or critical illnesses. These can easily cost tens of thousands, or even more.
Why Medical Costs Can Derail Your Retirement
Imagine this: you’ve worked hard, saved diligently, and retired with a comfortable nest egg. But one day, you’re diagnosed with a critical illness or require long-term care. Suddenly, your savings are drained by hospital bills, treatments, and caregiving costs.
This is the harsh truth about medical costs—they don’t just affect your finances; they affect your entire retirement. Here’s how:
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Depleting your savings: Medical bills can eat into the money you’ve set aside for daily expenses, travel, or leisure.
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Forcing you back to work: What if your savings aren’t enough? Will you have to return to work in your 60s or 70s just to stay afloat?
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Burdening your family: If you can’t afford your medical costs, the financial responsibility may fall on your children or loved ones.
As much as we all want to believe “it won’t happen to me,” the truth is, no one is immune. That’s why it’s so important to plan ahead.
How to Protect Yourself and Your Retirement
The good news is, there are practical steps you can take to safeguard your retirement from the threat of medical costs. It’s all about being proactive and intentional.
1. Get the Right Insurance Coverage
Insurance is your first line of defense against medical costs. In Singapore, we’re lucky to have MediShield Life, which provides basic coverage for hospitalisation and certain outpatient treatments. But for most of us, that’s not enough.
Here’s what you should consider:
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Integrated Shield Plans: These are private health insurance plans that enhance your MediShield Life coverage. They cover higher-class wards, private hospitals, and additional treatments.
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Critical Illness Insurance: This provides a lump sum payout if you’re diagnosed with a serious illness like cancer, stroke, or heart disease. The payout can help cover treatment costs or replace lost income.
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Long-Term Care Insurance: Plans like CareShield Life provide monthly payouts if you become severely disabled and need long-term care.
Insurance may feel like a big expense now, but trust me—it’s worth every cent when you need it. The key is to review your policies regularly and ensure you’re adequately covered.
2. Build a Health Emergency Fund
In addition to insurance, it’s a good idea to set aside a separate emergency fund specifically for healthcare costs. Aim for at least 6 to 12 months’ worth of expenses, but if you can save more, even better.
This fund will give you peace of mind, knowing you have a financial cushion for unexpected medical needs.
3. Maximise Your CPF for Healthcare
Your CPF isn’t just for retirement—it’s also a powerful tool for managing healthcare costs.
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MediSave: Use your MediSave account to pay for hospitalisation, outpatient treatments, and even certain insurance premiums.
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MediShield Life and Integrated Plans: Ensure you’re using your MediSave to fund these essential policies.
Top up your MediSave whenever possible. The interest you earn (up to 5% per year) can go a long way in covering future medical expenses.
4. Prioritise Your Health
This might sound obvious, but prevention is always better—and cheaper—than cure. One of the best investments you can make for your retirement is in your own health.
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Exercise regularly. Even a brisk 30-minute walk daily can do wonders.
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Eat well. Cut back on processed foods and sugary drinks. Go for fresh, whole foods instead.
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Get regular check-ups. Early detection of health issues can save you a lot of money (and stress) down the road.
Taking care of your body now is the best way to minimise healthcare costs in the future.
Final Thoughts: Plan for Health, Plan for Wealth
When we think about retirement planning, it’s easy to focus on saving and investing. But the truth is, no amount of financial planning is complete without factoring in healthcare costs. Because at the end of the day, what’s the point of having money if you don’t have the health to enjoy it?
Planning for medical costs isn’t just about protecting your wealth—it’s about protecting your freedom, dignity, and peace of mind. It’s about ensuring that no matter what happens, you’ll be able to live your retirement years with confidence and security.
And here’s the thing: it’s never too early—or too late—to start. Whether you’re in your 20s, 40s, or even 60s, taking steps today can make a huge difference tomorrow.
So take care of your health. Review your insurance. Build that emergency fund. Because when it comes to retirement, health truly is wealth.
You’ve got this. Jiayou!