For the most part, the retirement conversation is “save, save, save”. This makes sense considering the average 50 year old has only $42,797 saved for retirement, but there are many more decisions that have to be made. There are so many different factors that impact your ability to have a successful and happy retirement. So, what is missing? Let’s look at just a few of the important issues to consider.
1. Legal Documents
Get your legal documents in order. This starts with having a will and advanced directives. You should have a written statement of your wishes regarding medical treatment, including a living will, made to ensure those wishes are carried out should you be unable to communicate them to a doctor. In addition to advanced directives, be sure you have a will and it is up to date. Without a will, your assets will be distributed based on the state in which you reside. Having these important documents in place eliminates your family from having to make tough decisions during an emotional time. This will create clarity and peace of mind for all involved.
2. Social Security
36% of American adults over 65 are completely dependent on Social Security. While many retirees are fully relying on Social Security now, it’s running out of money, and will only be able to cover 77% of promised benefits in 2034. It’s so important to understand how Social Security will work within your lifestyle. There are different options with regards to how and when to take these benefits. Maximizing these options to fit in with your other planning is critical. Your adviser should be very knowledgable on the subject, discussing options with you and letting you know what you can expect.
3. Health Care
The average monthly health care expense for a couple at 65 is $583, according to HealthView, but expect to spend more than double that each month by the age of 85. With healthcare costs rising at an enormous rate, you may find most of the money you are living on will go to pay for doctors, prescription drugs and health related expenses. The type of Medicare Supplement Insurance you choose can have an important impact on your income in retirement. If you choose the wrong plan, you may find your standard of living will suffer because you are spending more for healthcare than you realized. And, there are nursing home costs that complicate this process even further. If you are sitting with a financial adviser and they are not including these important topics, you are not working with the right one.
There is a lot more to the retirement conversation than just saving. Entering into this phase of life can be an emotional process. There are many unknowns that have to be considered. Make sure you’re prepared so that you can spend your golden years without worry or fear that you will not be taken care of.