There are a lot of things to consider before you retire. One thing that some people forget to plan for, however, is their health care in retirement. Many people assume that Medicare will cover all their health care expenses once they retire. The reality is that it doesn’t.
According to Fidelity, the average retired couple typically has to pay $260,000 on health care expenses.1 That figure includes things like copays, deductibles, premiums and more. By planning ahead, you can help to avoid draining your retirement funds to pay for health care expenses. Act now to develop a sound health care funding strategy, and you can save your retirement money for things you want to do rather than spend it on health care expenses.
Annuities are offered in a wide range of different types, all of which serve different purposes. Deferred annuities offer a chance for growth and accumulation, often with downside protection. Immediate annuities don’t provide growth or liquidity, but they usually generate a guaranteed* lifetime income stream.
Have you hesitated to explore an annuity as part of your retirement planning? If so, you could be missing out on a tool that is helpful for generating income and managing downside risk. While an annuity isn’t appropriate for everyone, it can be useful in the right situations.
According to a 2015 survey from Rocket Lawyer, 64 percent of Americans don’t have a will.1 A will is often the most basic step in developing an estate plan as it provides guidance and instruction on which assets should flow to which heirs after your death.
A will is a valuable tool, but it can’t do everything. Even if you have a will, you may still have needs and goals that aren’t sufficiently addressed by your current plan. You may want to consider a trust.
Are you one of the millions of Americans hoping to retire early? Many people not only want to retire—they want to do so while they’re still young enough to be active and to enjoy some of their biggest goals in life. With focus, discipline and detailed planning, you can make it happen.
Even if you don’t plan on retiring early, it still makes sense to consider the possibility. Many retirees are forced to retire earlier than they would like because of medical issues or job loss. If this happens to you, a contingency plan could help you better manage the situation.
It’s difficult enough to accumulate assets to fund a normal retirement, but it’s even harder to save when you retire early. An early retirement means fewer years to save and more years of spending that have to be funded with your own assets.
Not sure whether you have enough life insurance protection? According to a recent Bankrate Money Pulse survey, there’s a good chance your coverage amount could be insufficient. The survey found that nearly 40 percent of all American adults don’t have life insurance. Among those who do have policies, almost half don’t have enough.1
There are many reasons why people carry less insurance than they need. Insufficient coverage could lead to financial difficulties for your dependents and loved ones if you unexpectedly pass away.
Do you use an employer-sponsored 401(k) as your primary retirement savings vehicle? You’re not alone. Since its inception, the 401(k) has quickly become a popular employee benefit, and it has largely replaced the pension as the top employer-sponsored retirement plan.
A 401(k) can be a powerful retirement accumulation vehicle for a few reasons. One is its tax treatment. A 401(k) plan is tax-deferred. That means you don’t pay taxes on the growth as long as the funds stay inside the plan. That tax deferral may help your funds accumulate at a faster rate than they would in a taxable account.
Do you own a traditional IRA but think a Roth may be a better option? You’re not alone. The Roth IRA has become an increasingly popular savings vehicle. That popularity is driven largely by its unique tax treatment, which allows you to take tax-free distributions in retirement and leave a tax-free asset for your loved ones.
Not everyone can contribute to a Roth IRA, however. Roth contributions are governed by income limits. If you’re a high earner, you likely haven’t been able to put money in a Roth. The traditional IRA doesn’t have income limits for contributions. Your traditional IRA contributions may not be deductible if you have high income, but that doesn’t mean you can’t contribute.
You’re probably aware of the risk posed to retirees by long-term care, which is extended assistance with daily living activities such as eating, mobility and bathing. Long-term care is often provided either in a facility or in the home, and it is usually very costly.
AARP recently published a report on the current state of long-term care. Specifically, it ranked each state by the quality and affordability of care available to seniors. While the scores and information vary by state, there is some information that’s applicable to all retirees, regardless of where they live.
Do you have a strategy to pay out-of-pocket medical costs in retirement? If not, now may be the time to start planning.
According to Fidelity, the average retired couple will spend nearly $260,000 on out-of-pocket health care costs.1 Those costs are for things like deductibles, copays, prescription drugs, premiums and much more. It doesn’t include costs for long-term care, which could significantly increase your health care expenses.
Many retirees incorrectly believe that Medicare will cover all their medical costs in retirement. The truth is that Medicare usually covers only a portion of your expenses. Some types of care aren’t covered at all. That means many retirees face sizable bills that they must pay out of pocket.
Behind on your retirement savings? You aren’t alone. According to Gallup’s 2017 study of financial concerns, more than half of all Americans are worried about their ability to pay for retirement.1
If you’re behind on your savings plan, conventional wisdom is to simply save more money. However, that may not be a feasible option. After all, there’s only so much money you can save out of your paycheck. No matter how far behind you are on retirement, you still have to cover current bills and expenses. It may not be possible for you to put more money in a 401(k) or IRA.
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