The number one consideration of most nearing retirement is will I outlive my money? The second, which is really part of the first, “How will I pay for long term care if one or both of us require assistance, whether at home, in assisted living or a nursing home?”
There are two basic questions that no one can answer:
- How long will I live after I retire?
- What will happen to the stock market, tomorrow, next month, next year, or the next ten years?
Will I still have enough income to support the lifestyle I want after I retire? What happens when one spouse dies, will the remaining spouse still have enough income to maintain the life they both planned to live? How do I make provisions for the income gaps that will occur when I go from bringing home a regular paycheck to relying on my retirement income? How much income will my spouse continue to receive after I pass when one social security check is terminated and what happens to pension income after passing? Does it continue, terminate or get reduced? What happens if one or both spouses need long term care?
Doesn’t it make sense to provide a guaranteed source of income that you cannot outlive, that will not decrease because of the death of one spouse, and that will meet your needs, including the effects of inflation, throughout your retirement?
Retirement planning is more than planning for finances in retirement. While insuring adequate retirement income is the number One concern, other considerations cannot be ignored. Each of us is different and have different needs. Are you married, widowed, divorced, single? Do you have children? Are any of your family dependent on you for partial or complete support. What is your medical condition? What type of medical facilities will you require in retirement? If not working, what will you do in retirement? The quickest way to get “old” and deteriorate is to sit around and do nothing.
During your working years, social interaction may have been provided by contacts at work, neighbors and friends, contacts at church or social clubs, interaction with other parents through your children’s friends at school or church activities. The availability of many of those contacts may wane after retirement. Children grow up and make new friends, go away to college or the military, transfer to various locations to accommodate their own job requirements. The need for social interaction remains.
Where will you live when you retire? Will you stay in the same home you’ve lived in for years. Do you need something smaller when the children move out? Are you tired of shoveling snow and want to move to Florida or Arizona? Do you have hobbies that you want to be able to pursue when you have more time to do so? Do you want to travel and see the world? Do you want to start a parttime business to satisfy a passion that your employment didn’t allow time to explore?
How about healthcare? Will medicare pay all your medical expenses? What does medicare pay for? Do you need to supplement the coverage from medicare with a supplement or other alternative? Do you need prescription drug coverage? How about long term care? Do you have special needs that dictate that you live close to facilities that offer the specialized care that you need?
One of the most significant planning activities is to eliminate debt before retirement. Having to make those recurring payments during retirement is one of the largest “stressors” expressed by most retirees. Interest rates paid on debt is far greater than interest earned on savings. Get rid of debt and enjoy the feeling of freedom that results.
Each of these, and many more, are valid and important considerations. Let us help you identify and then guide you to solutions that insure that you have the income for life you need when you retire.