We hear about retirement all our lives, but a recent poll suggests many people are unprepared for the day they no longer have to work. The poll found more than one-third of Americans are unprepared for retirement.
The poll found that 36% of Americans have not set aside money for their future retirement, and 38% say they will work beyond age 65.
Hopefully, you have already figured out how much money you'll need after retirement to maintain your lifestyle and cover your expenses. You can do several things to figure out the amount of money you will need to fund your retirement, but you need to take the time to calculate your needs.
There are other items to consider. Here are five steps to prepare for your upcoming retirement.
Decide When to Retire
The most popular age to retire is somewhere between 65 and 70, but others may choose to continue working past this point if they can. While you can technically retire at any age, there are certain risks associated with retiring early:
You will have less time to save for retirement
You could experience a sense of loss or identity crisis arising from losing your job title
There may be financial penalties
Decide Where to Retire
Would you rather stay close to home or move far away? This decision can make a big difference in how you spend your retirement and will depend on the connections you have where you live now.
While some retirees seek a warm climate, others prefer four seasons. You'll also want to think about whether or not you like spending time outdoors because this will factor into which climates are best for your retirement lifestyle.
Here are 50 locations, based on the weather, to consider.
Decide What You'll Do in Retirement
Retirement can also be a chance to try something entirely new: something you've never had the time for before, like painting, playing guitar, or building birdhouses. Perhaps now is the opportunity to get fit by joining a gym, cycling, or doing yoga at home.
You can choose to do something you've done before — something that brings comfort and joy to your life. You can catch up on your hobbies or give back through volunteering in your new free time. The choice is yours!
Plan for Your Health Care Needs
Medicare is a health insurance program primarily for those aged 65 and older. You have paid taxes for Medicare your entire life. It's vital to understand what kind of coverage Medicare provides because it determines how much money you'll need in retirement to maintain a comfortable standard of living.
You will usually purchase a Medicare supplement to pay for the deductible and items Medicare will not pay for. Plus, there is prescription drug coverage you can also purchase.
Medicare and supplements will not pay for most long-term care services beyond 100 days of skilled services. Since the likelihood of you needing assistance with daily living activities or supervision due to dementia is high and gets higher as you get older, these expenses can cripple your finances and create a burden on your loved ones.
Long-Term Care Insurance is an option for many families but is usually purchased before retirement.
Medicaid is only an option for health care, including long-term health care, if you have little or no income or assets.
As with most things in life, retirement takes a little planning — financial planning, to be exact. You have to have saved enough to enjoy a comfortable retirement during your working years.
One way that some people choose to save is with an IRA. An individual retirement account is a retirement plan that offers tax advantages for retirement savings. Many employers offer 401(k) or 403(b) retirement plans which are usually rolled into an IRA when you leave your employer or retire.
You can even add noncash assets to your IRA. These types of accounts are just one part of retirement planning. Talking to a retirement specialist early is critical.
Get Started on Your Estate Plan
Don't put this off: You'll want the following documents in place at least a few years before you retire:
Power of attorney
Health care proxy
Advance medical directive
These documents outline your wishes regarding how your money should be handled in the event of your passing. Your estate plan can also provide instructions as to what happens if you're incapacitated and unable to make decisions for yourself.
Follow these steps to prepare for your upcoming retirement. Create a plan now to be happy and comfortable later. If you're ready on all fronts, you can look forward to spending your golden years doing everything you've always wanted — your way.
About the Author
Mallory Knee is a freelance writer for multiple online publications where she can showcase her affinity for all things beauty and fashion. She particularly enjoys writing for communities of passionate women who come together for a shared interest and empower one another in the process. In her free time, you can find Mallory trying a fun new dinner recipe, practicing calligraphy, or hanging out with her family.
Contributor since September 25th, 2020
Delay and procrastination are two things that can destroy a future retirement plan. Aging happens, and you must use the years before retirement to prepare.
The costs of health care, especially long-term health care, can destroy a retirement plan. You don't know when your health will decline or when a significant illness or accident will cause you to need long-term care services.
Start all your retirement planning now - well before you get close o retirement age. One key area to consider is to make sure you have addressed the costs and burdens of declining health and the consequences of aging.
For many people, affordable Long-Term Care Insurance is a solution. LTC Insurance is very affordable despite some of the articles you may have read.
For example, a couple aged 50 in good health can obtain a plan that pays $3000 each a month in long-term health care benefits, with an initial $108,000 benefit account (each), with 3% compound inflation (your benefits - not premium increase every year) for under $190 a month.
Premiums can vary over 100% between insurance companies. The premiums are based on your age, health, family history, and the total amount of benefits within the policy.
Experts suggest planning when you are younger and healthier. Most people obtain coverage in their 50s.
Seek Professional Planning Help
Experts recommend seeking the help of a qualified and experienced Long-Term Care Insurance specialist to help you find the right coverage. A specialist will match your age, health, and family history with the right coverage at the right price.
Long-term care is a very specialized area, and few insurance agents and financial advisors have the expertise. Find a specialist who represents the top companies, as premiums can vary over 100% between insurance companies. Leading specialists will often have over 500 clients with Long-Term Care Insurance.
A specialist will save you money. You will have peace of mind knowing they are making the appropriate recommendations - Work With a Specialist | LTC News.
Planning Tools and Resources Available on LTC NEWS
Planning for the future is never easy, but long-term health care planning can be very complicated and comes with many emotions. Getting the right tools and resources will make the process much easier.
One of the goals is to reduce the stress and anxiety usually placed on your family at the time of crisis. LTC NEWS can be beneficial in providing you with important information for you to consider.
LTC NEWS has put in place several resources, including:
The LTC NEWS Cost of Care Calculator will show you the current and future cost of long-term health care services where you live. Plus, each state has vital state-specific information you should know - Cost of Care Calculator - Choose Your State | LTC News
The Ultimate Long-Term Care Guide is an outstanding read to help you get a good overview of the topic area.
Compare the major insurance companies that offer Long-Term Care Insurance products here - Top Insurers for Long-Term Care Insurance | LTC News.
A detailed tax guide that includes available tax incentives can be found by reviewing the Long-Term Care Tax Benefits Guide.
Find all the resources on LTC NEWS - Resources for Long-Term Care Planning | LTC News.
Finding Quality Care for Mom or Dad
If your family is already in crisis and you need to find help for mom or dad, LTC NEWS can help. We have put together several comprehensive guides to help you in your process.
Start by reading our four guides -
If your loved one is lucky enough to own a Long-Term Care Insurance policy, be sure they use it. Sometimes families wait, thinking they can save the benefits for a rainy day. Waiting on using available Long-Term Care Insurance benefits is not a wise idea.
Get Help in Filing a Long-Term Care Insurance Claim
Many insurance companies have issued Long-Term Care Insurance policies over the years. Filing a claim can sometimes be complicated unless you know what to do or get expert help and assistance.
Don't allow the claim process to stop you from using the benefits available in an LTC policy. Quality care obtained early will help provide a better quality of life and reduce the risk of a deep decline and facility care.
If you need help in starting the process of a Long-Term Care Insurance claim, LTC NEWS can help. LTC NEWS provides free assistance with no obligation to help you or a loved one complete the claims process with a Long-Term Care Insurance policy. We have teamed up with Amada Senior Care, who will do all the work - free with no obligation.
Get help finding quality caregivers or long-term care facilities and get recommendations for a proper care plan, whether a person has a policy. - Filing a Long-Term Care Insurance Claim | LTC News.
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 requires help and assistance. You might be eligible at younger ages as well.
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, and 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" Mike Banner will answer your questions regarding caregiving, aging, health, retirement planning, long-term care, and reverse mortgages.
- Just "Ask Mike." - Reverse Mortgages | LTC News.
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You can write a story or ongoing column for LTC NEWS. You can write about many topics, including aging, caregiving, health, lifestyle, retirement planning, and long-term care, to name a few.
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