What Comes First–Wealth or Health?

Workers increasingly see themselves as more physically fit than fiscally fit, suggesting that good health is their strategy for saving money in retirement. But until they get control of their finances, their health is at risk no matter how many laps they may swim.

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Most people get it: The key to happy and productive retirement years is staying healthy. Yet, it’s not just about diet and exercise. How you manage your money often determines your level of stress, which if too high may lead to chronic health problems like heart diseases and diabetes.

So you’ll have to do more than switch to whole wheat and start jogging around the block every day. Your health also depends on feeling good about and in control of your finances. Not a lot of people understand that—and relatively few are doing much about it.

In a survey, Principal Financial found that just 48% of American workers are monitoring their spending—down from 58% two years ago. Fewer are re-evaluating their investments, and while more are using a budget the rate is still low at just 28%. In other words, they aren’t in control of their money.

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The vast majority of American workers see the link between wealth and health as one directional: Staying healthy is the ticket to saving on healthcare costs, which is the ticket to financial security in retirement. In the survey, 84% said being physically healthy is good for their financial future and 76% said if they spend time and money on their health now they will avoid major health costs later in life.

“The connection that people are starting to make is if they are healthy, they are more likely to be able to spend their money on things they enjoy versus spending it to deal with health issues,” says Luke Vandermillen, vice president of retirement services for The Principal.

Yet it’s not that simple. Good health comes with its own financial demands. Living healthy means living longer, which is wonderful. But without a traditional pension or other source of guaranteed lifetime income how will you pay for all those extra years? You’ll need to save tens of thousands of dollars more than you may have figured in your lifetime—and still there is no guarantee you won’t need costly, albeit delayed, end-of-life services.

None of this is to say that living longer and healthier isn’t a boon, and probably even less a demand on your resources than developing chronic illness and passing away early. But the link between fiscal health and physical health goes both ways. In the survey, workers were far more likely to rate themselves physically healthy (53%) than financially healthy (31%), suggesting they see it as a one-way street: health leads to wealth. But it’s also the case that feeling in control of your wealth—no matter how much you have—leads to better health.

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