What is the health corpus needed at Retirement

What-is-the-health-corpus-needed-at-retirement?

“From the bitterness of disease man learns the sweetness of health ” a Catalan proverb.

Health is now a growing concern and matter of interest for all . Wellness is an industry and many young people opt for a balanced diet and regular exercise rather than lead a sedentary lifestyle . A fit body is no longer a matter or fashion or fame but a matter of lifestyle. Awareness among the younger generation is growing and this is a big leap from ‘couch potato’ lifestyle to a ‘millet friendly organic food ‘ lifestyle.

The Indian wellness industry was estimated at close to Rs 85,000 crore in financial year 2014-15 and is expected to grow at a compounded annual growth rate (CAGR) of nearly 12% for the next 5 years. The report Value Added Service – Wellness and Preventive Healthcare stated that wellness will be a key growth driver of health insurance in India.

There has been a major epidemiological transition in India in the last 25 years, and the focus has shifted from communicable to non-communicable diseases (NCDs). The major reason for this is the change in economic conditions, resulting in a shift towards an unhealthy lifestyle. In line with this change in the population , the Government has prioritized in the National Health Policy the below points –

The policy identifies coordinated action on seven priority areas for improving the environment for health:

– The Swachh Bharat Abhiyan –

– Balanced, healthy diets and regular exercises.

– Addressing tobacco, alcohol and substance abuse

– Yatri Suraksha – preventing deaths due to rail and road traffic accidents

– Nirbhaya Nari –action against gender violence

– Reduced stress and improved safety in the work place

-Reducing indoor and outdoor air pollution

With growing concerns of NCDs , people are forced to pay huge amount of money for diagnosis and treatment. The growing cost of treatment has got us thinking about the future – To create a health corpus.

The cost of treatment rose at a double-digit pace of growth, outpacing average inflation in both rural and urban India over the past decade, according to the recently published results of a cross-national survey on health conducted by the National Sample Survey Office (NSSO) in the first half of 2014.

Source: http://www.livemint.com/Opinion/DSH1OnDr2LG0zAcHhl29XJ/The-growing-burden-of-healthcare-costs.html

Source of picture : http://www.livemint.com/Home-Page/SB8TIw7eLnm9JPTz0t4jUJ/Indian-wellness-industry-likely-to-hit-Rs15-trillion-by-FY2.html

Considering a hike at a minimal of 8% in 10 years and 20 years , we have calculated below,projection of costs in  2027 and 2037 that are not covered in a normal health insurance plan.

How much ??

A medical expense hits when you least expect it. Like a broken arm , a ligament tear , hernia , which are the least intensive of all. You will have to lose time & money in getting back to you usual life.

So what is the money one will need at retirement ? Here is a simple illustration for a small start of Rs.5000 a month  invested at a 12 % for 10 years and 20 years.

The corpus available after 10 years would be Rs 11,50,193

The corpus available after 20 years would be Rs 49,46,276

This is a sample for a one person investment , if you consider a family of 3 or 4 , the amount gets multiplied and so on.

Why not  ?

What all could you otherwise do with a  fresh pay cheque. A new iphone ? a five star meal ? a new pair of shoes , new jacket ? designer handbag, sale at lifestyle ? a new music player and the list in pretty endless. It still never goes out of style to have a good head on one’s shoulders.

Sneha Ramamurthy

Content Writer- Dilzer Consultants Pvt Ltd

Sources

http://mohfw.nic.in/index1.php?lang=1&level=1&sublinkid=6471&lid=4270