Are you, your spouse, or both of you getting ready to retire? Does the thought of retirement give you a sense of excitement or apprehension?
Life after retirement doesn’t have to be a cause of stress and anxiety. Proper planning about your finances and expenses today can ensure a great life in retirement tomorrow.
The key is to plan ahead.
YOU RETIRED – NOW WHAT?
Many retirement guides are eager to give you numerous suggestions on spending all your new free time.
These suggestions include everything from travel to exercising.
But the big questions that they don’t tackle are will your money hold out, how do you budget and still have a great time, and how do you not worry?
The society of Actuaries has written that “a man in his mid-50s today has about a one-in-three chance of reaching age 90. While a woman of the same age has roughly a 50% chance.”
This translates to the fact that you will probably spend an equal number of years after retirement that you spent during your working years.
HOW CAN I HANDLE MY MEDICAL EXPENSES AFTER RETIREMENT?
The biggest worries seniors have about their retirement years are focused on healthcare.
28% of Americans fear that their medical expenses will be too high for them to retire.
According to HealthView Services, a 65-year-old couple in good health who retired 2 years ago with Medicare Parts B and D plus some supplemental insurance coverage will pay $387,644 for healthcare for the remainder of their lives.
The annual healthcare expenses come to between $4,500 and $5,200 depending upon if you have a plan like Medigap that includes drug coverage.
WILL I OUTLIVE MY MONEY?
According to the Social Security Administration, nearly 25% of all 65-year-olds will live to age 90, and almost all of them worry that they will outlive their money.
It is generally accepted that if you want to retire at 67, you will need 80% of your annual pre-retirement income. By that time, ideally, you would have saved over $1 million.
It’s time to think whether that number is attainable for you.
The major categories of spending are mortgage or rent payments, interest payments or other debts, travel, major purchases, entertainment and recreation, out-of-pocket medical expenses, charitable donations, and taxes. This is where we recommend speaking to a financial planner.
IS IT POSSIBLE FOR ME SAVE MONEY AFTER RETIREMENT?
It is possible to save money after retirement.
Here are some tried and true methods to accumulate more money after you retire:
- Get a part time job like working in hospitality or customer service. Or, if you’re the creative type, start selling your wares at craft and art shows.
- Consider a reverse mortgage – a loan borrowed against the value of your home.
- Downsize/Downsize/Downsize. It’s time to realize that what your kids don’t want now, they won’t want after you’re gone. Sell off your antiques, designer clothes or the extra car. Put this newly acquired cash into savings.
- Talk to your financial planner about updating your 401(k) and IRA contributions. Remember that although you can’t contribute to a traditional IRA after the age of 70 ½ you can still contribute to a Roth IRA.
- Look into public benefits. Check out The National Council on Aging website. They have programs that may help you to decrease your expenses, and you may be eligible for some of their benefits like medical assistance, transportation, etc.
The above items should be closely studied and discussed with the experts at The Kabb Law Firm.
We can help.
Talk to Rachel or our social worker.
Getting ready to retire doesn’t have to be a scary unknown road. We have answers to your questions at 216-991-5222.