Retirement Funds – Key Ingredients for a Successful Future Retirement

We often ignore the concerns of longevity and retirement. When you are older your options diminish. Planning for retirement should be a priority at any age. Saving and protecting those savings especially from long-term care is critical.

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Retirement Funds – Key Ingredients for a Successful Future Retirement
4 Min Read December 3rd, 2019 Updated:January 19th, 2022

Retirement funds are perhaps the last thing on anyone’s mind when they are in their 20s. This could be why in their study on household finances, the Federal Reserve found that 26% of non-retired Americans have no form of retirement savings whatsoever, with 30% being over the age of 45. However, regardless of what age you are in life, you can still start your retirement funds — it just takes a little patience and dedication. On that note, we’ve outlined a few ways you can start building your retirement fund.

Before Anything, Prioritize Emergency Funds

We know this is an article about retirement — but as you grow older, you will become more prone to health problems, and dipping into your retirement funds is not the solution. Setting up an emergency fund first is more important, as Marcus points out that it can be a powerful safety net that can offer you a little peace of mind when you need it most, whether it’s for a health emergency or your car breaking down. Start by setting a goal and saving small amounts each month where possible — even $25 is better than nothing. You can do this in tandem with saving for your retirement funds, but make sure you prioritize reaching the goals of your emergency fund first.

Set a Goal for Your Retirement

Having an idea of how much you want your retirement fund to be will help put things into perspective for you. There is no one-size-fits-all number, however, as everyone has their own goals and specific lifestyle habits. You can start by figuring out when exactly you want to retire, which will determine how much you can save. Given that you’re planning a little later in life, it might also be prudent to retire a little later as well. If you’ve already determined when you want to retire, calculate your monthly spending, get the annual cost, and multiply that by at least 10 years. For instance, if you expect to retire by 65 and spend at least $70,000 in expenses per year, then you should have at least $700,000 by the time you retire.

Set Up Sources of Passive Income

When you’re retired, you’re unlikely to have any other form of income aside from what you’ve saved — which is why making these sources now is vital. Money Crashers suggests some ways you can make extra income, such as renting out extra properties you may have, starting or investing in a small business, freelancing or consulting, investing in the stock markets, and even blogging. However, you decide to gain passive income, it’s best to start as soon as now. Not only is it great for your future, but it will also give you some extra cash-in-hand, and an additional cushion for emergencies.

Protect Your Assets

Planning for retirement isn’t just about making sure you have money for the future — it’s also about making sure that money is protected before retirement. In our article entitled ‘Five Ways to Protect Your Retirement Income’, we detailed how keeping an eye out for inflation is an important thing to do, as it can affect your buying power. Additionally, it’s important to avoid withdrawing from your retirement savings too much, which is the purpose of your emergency funds. You should also create a will so that in the event of an untimely death your assets will go to whomever you want them to go to.

What does your retirement plan look like so far?

Retirement planning late in life will require a lot of commitment and discipline — you may be used to living a certain kind of lifestyle, but thinking of the future should be your top priority. We hope our list of tips will help you jumpstart your plan, as no matter what age you are today, whether you’re 40, 50, or even 60, starting small and setting goals will be enough to help you live a financially stress-free life.

Some people become overwhelmed when discussing the markets and investing. This guide will help make it more simple: 

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About the Author

Jena Bessey is a long-time writer, short-time freelancer. After quitting her desk job to pursue opportunities on her own, she's found that in the solace of working in her own home, she gets more done. It's a plus that she gets to bask in the presence of her 2 beloved dogs, and 3 cats who she shares a passionate love-hate relationship with.

LTC News Contributor Jena Bessey

Jena Bessey

Contributor since December 3rd, 2019

Editor's Note

Many American families have spent little time planning for their retirement. Too often we save too little. If you are in your 40s or 50s saving for your future retirement is already critical. However, you need to consider more than just saving money. You need a plan to safeguard the assets you do have from the risks which will impact savings, income, and lifestyle.

This is where long-term care planning comes into play. There are very few people who can’t wait to purchase another insurance policy. Yet, an affordable Long-Term Care Insurance policy is an essential part of your opportunity to not only enjoy your future retirement but to reduce the stress that otherwise will be placed on your family.

Extended Care Happens at all Ages but Increases with Age

You might not know that as you get older your risk of needing help with normal living activities will increase. There is a reason you see so many assisted living facilities, nursing homes, memory care facilities, adult daycare centers opening all around us. It is hard to watch TV or listen to the radio and not hear commercials for home health care providers. The reason is longevity and advances in medical science. 

Your health insurance, including Medicare and supplements, will not pay for the majority of long-term care expenses we will face. Don’t confuse your employer’s disability insurance with long-term care. Disability insurance just replaces a small portion of your income when you are unable to work – usually until age 65. It does not pay for care (read more by clicking here). The result: we will either have our family become caregivers or one of your family members will manage your care and spend your money to pay for it. You lose independence and control and your family gets the pressure and strain. 

Cost of Long-Term Care is Not Cheap

The fact is long-term care is expensive whether it be care in your own home or in some type of facility. Even the wealthy can face financial challenges much less than the rest of us. How much does long-term care cost? Take a look at both the current and future cost of care services by using the LTC NEWS cost of care calculator – view it now by clicking here.

If you had to pay for care today how would that impact your savings, income, and lifestyle? Now, what happens when you are 78, 82, or older? How will that affect your children and their families? They will have their own careers and responsibilities. This is why planning in advance is so essential.

Long-Term Care Insurance is Affordable Asset Protection

When you purchase a Long-Term Care Insurance policy, especially in your 40s or 50s, you will find the premiums are very affordable and the benefits are powerful. 45 states offer special Partnership Long-Term Care Insurance plans which provide dollar-for-dollar asset protection. This allows you to shelter part of your assets in the event you exhaust the benefits from your policy and still access the Medicaid long-term care benefit. So instead of being poor, which is the usual way to access Medicaid, you can keep a number of assets equal to the amount of benefits paid by your policy. This allows you to design a smaller plan which matches your savings. See if your state is a partnership state by clicking here

Policies are Custom Designed

Long-Term Care Insurance is custom designed. You get to decide the total amount of coverage. Even a small policy can reduce the stress and burden on your family. Plus, premiums can vary dramatically when you compare different insurance companies for the exact same coverage. In addition, the underwriting criteria is different with each insurance company. 

This is why you need the help of a qualified and experienced Long-Term Care Insurance specialist. Most insurance agents and financial advisors lack this expertise. Many will offer expensive life insurance policies that do not meet federal standards for long-term care. 

LTC Specialist Will Provide Accurate Quotes & Professional Advice

LTC NEWS can help you find a true specialist who works with the major insurance companies. They will understand the features, benefits, underwriting standards, partnership options and more in order to help you shop for the best coverage at the best value.  Click here to find an LTC NEWS Trusted Advisor.

The best time to take action is before you retire. Be sure to have a plan for the financial costs and burdens of aging so your family will have the time to be family.

Find Quality Caregivers and Long-Term Care Facilities

If your parent or loved one needs care now - or soon - you will need to find the appropriate care in the right setting depending on their needs.

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Benefits of Reverse Mortgages 

Today's reverse mortgages for those aged 62 and older could be an ideal resource to fund a Long-Term Care Insurance policy OR even provide money to pay for care if you, or a loved one, already needs help and assistance.  

Some people have much of their savings invested in their homes. With today's reverse mortgages, you can find ways to fund care solutions, care itself, even help with cash flow during your retirement. 

Learn more by asking questions to an expert. LTC NEWS columnist and host of the TV Show "62 Who Knew" will answer your questions regarding caregiving, aging, health, retirement planning, long-term care, and reverse mortgages. 

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Get Expert Help Filing an LTC Insurance Claim

LTC NEWS provides free assistance with no obligation to help you or a loved one complete the claims process with your Long-Term Care Insurance policy. 

You can also get support in finding quality caregivers and get recommendations for a proper care plan, whether a person has a policy or not. - Filing a Long-Term Care Insurance Claim | LTC News

Planning Tools and Resources on LTC NEWS

You can find many tools and resources on LTC NEWS to assist you in your research for a planning solution or help your family find the appropriate care for a loved one at the time of crisis. 

To help you plan for the future costs and burdens of changing health and aging, LTC NEWS has put in place several resources, including:

Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News

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