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For many, planning for retirement starts early on. When you create your plan for retirement in advance, it’s easy to feel comfortable you’ll be ready to take retirement by the horns. However, if you’re not updating your plan to account for some key components of retirement, you might not be fully ready to adopt the lifestyle you think you’ve planned for. Here are a few things to plan for before you take the big leap into retirement.
Your Health
Health care is a major cost for almost every senior. In fact, couples retiring today can expect to spend at least $250,000 on insurance premiums alone during retirement. This is a huge cost that not many folks anticipate. The assumption that Medicare and/or Medicaid, and Social Security benefits will take care of healthcare needs during retirement is simply wrong, and it’s one that not many people can afford to make, though they don’t find that out until it’s too late. Are you in good health? Even if you enter retirement strong and healthy, there’s no guarantee you’ll always be without medical needs. As seniors age, the need for medical care increases, and with it so do costs.
Your Housing Options
Dwelling space is one part of retirement some seniors don’t like to think about. Once you’ve lived in a home for a long time, it’s become a very intimate part of your life. Even if you own your home outright, you’ll still need to cover the costs of annual taxes and maintenance. Additionally, many people own homes big enough for an entire family, which may be more space than necessary for an individual or married couple. Consider the costs of your home, and its layout. If many stairs are involved, you might find it more difficult to traverse as you get older. Smaller homes give seniors easier access to the things they need without having to strain themselves, and probably have lower property taxes and upkeep costs.
Many seniors also eventually require close medical attention. Weighing the options of having in-home health care versus care in a retirement home can play a big role in what your housing expenses will be throughout your retirement. What works right when you retire might not be best suited for you down the line. It’s important to keep this thought in mind as you make big decisions about home ownership or investment that will affect your entire retirement.
Your Lifestyle
We all daydream about our lives in retirement and what we’d like to spend the afforded time doing. For some, it’s travelling around the globe and experiencing new cultures. For others, it’s spending their time with family and grandchildren. Whatever you see for yourself in retirement, it’s vital that you compare your finances to your dreams. Daydreams are often just that, unless we are proactive in making them come true. Consider the lifestyle you see for yourself and assess your financial situation. Do your available retirement funds allow for such a lifestyle? Can you support yourself financially while still getting to do the things you always wanted to do? Taking the time to measure this before you retire can help you understand how you need to adjust to financially support everything you envision for yourself in your retirement.
Many retirees find themselves locked into a fixed income that doesn’t fully support everything they want out of their retirement. Luckily, there are ways to help pad available funds and live the life you see for yourself. By selling a life insurance policy that is no longer needed or wanted through a life settlement, you can acquire a large sum of money immediately to help you start living how you want to live. Learn more about how life settlements work today!
Case Study:
Jim owned a $250k life insurance policy to pay off the home mortgage in the event of his untimely death. Jim has since retired due to his declining health and the home mortgage is paid off. Jim’s life insurance policy was no longer needed and the premiums have become too expensive. Jim was planning on letting the policy lapse as it had no cash value, until he discovered he could sell it and received $48,000 in cash. Jim paid off some medical bills and invested the balance for he and his wife’s retirement.
