Don’t Come Up Short When It’s Time to Retire

Researchers estimate that fewer than half of Americans will save enough for retirement – a disparity which is augmented by a climbing life-expectancy. Retirees are going to require enough savings to cover long-term care expenses. This should make us all take stock of the risks posed to our own financial safety nets. Don’t come up short – build a retirement plan for a long-term income stream(s) and measures to mitigate inflation costs in order to support living well into your old age.

7 Circumstances to Consider When Planning For a Long and Healthy Retirement

Don’t rely on government benefits. Historically, the federal government has offered health care and living assistance programs to seniors. Unfortunately they will likely see those government benefits shrinking when federal spending cuts and new taxes are looming on the horizon. If you are planning your retirement while you are still young, be prepared to pay a larger portion of your health and living expenses which are currently subsidized by the government.

You might need to work longer. If you began have debt, kids to put through college or began putting away for retirement late, a longer life span means you may need to continue working or consider an encore career. If you can handle the labor, every year you work beyond retirement age

is a chance to increase the size of your retirement savings accounts, increase social security benefits and build a nest-egg for your golden years, when you need it most.

You will probably live longer than your plan projects. Even if you are healthy and work past the age of 65, you may need to plan for about 30 more years of living expenses. Many of those later years will require the most costly expenses, such as medical treatments, a nurse caregiver, pharmaceuticals and funeral arrangements. Consider supplementing the income from your retirement savings accounts with longevity insurance – an insurance annuity which begins payments at the age of 85, for those long term care expenses.

Health care costs are rising. As baby boomers retire this aging population will require more attention and treatment by doctors and caregivers which are already in short supply. When planning for the future not only should someone plan for inflation but market factors driving up the cost of general health care benefits, assisted living, nursing home care and long-term care for seniors. Living longer will means your retirement savings will have to stretch over years of these costly expenditures.

Pensions are not what they used to be. Governments and businesses of all sizes are having a hard time delivering on promises of secure and growing pensions in the current economy. And it is possible newly hired workers can expect their benefits plans not to be as strong as the previous generation of employees. That means you may have to make plan adjustments to cover that extra 20% of personal contribution in a low interest rate, low growth economy.

Do not use your retirement accounts or home as a piggy bank. Build an emergency fund or other account to cover fun expenses, don’t dip into your home or pension. The market has been slow to recover from the recent dip in home prices, so sit on the equity in your home to avoid assuming more debt as your income stream becomes limited. You might need that roof over your head in the years to come or at least you’ll need a good price when you decide to sell.

Take advantage of any eligible social security benefits. It is hard to predict how these benefits will continue to be funded in the the long-term, so be sure to take advantage of any social security by making claims with careful planning and utilizing these fixed payments to cover the essentials – taxes, health care, and daily support – allowing your retirement savings to last longer.

Every individual situation requires a unique approach to retirement planning. When you sit down with your attorney, insurance, tax or financial professional for specific advice on your circumstances be sure to have your short and long-term retirement goals in mind. Build a comprehensive plan for those extended golden years and don’t fall short you when need financial support most.

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