Retirement planning is a broad term that encompasses envisioning and planning for any and all events that can and will happen during your retirement years. It is much more complex than simply contributing to a 401k, opening an IRA or belonging to a pension plan. Besides planning for retirement income, you must also consider the tax implications of the investment strategies you choose, what insurance you will need, how you will pay for it, as well as what you will leave your family upon your death.
Develop a realistic, long-range retirement plan
When you reach retirement age, will you have enough to outlast your life? People today are living healthier lifestyles and advances in healthcare have resulted in longer life expectancies than ever before. Did you know that the average person will spend almost as many years in retirement as they did in the workforce? The estimated time in retirement is 25 to 30 years.
A change in lifestyle means a change in living expenses. While entering retirement decreases work-related expenses, other expenses can increase to take their place such as recreational and social activities, traveling, and insurance premiums. Will your mortgage be paid off by the time you retire? Will you have to support one or both of your parents? Will you continue to have access to group health insurance? Anyone these factors can influence the number of retirement expenses you will need. One step toward planning for retirement is to make a list of your potential retirement expenses, and determine if your retirement income strategies are in line to meet those needs. A financial advisor will work with you to identify and realize your goals and objectives and help to provide a clear path to a successful, stress-free retirement.
Protect yourself with an insurance strategy designed for you
You have spent years and countless hours preparing for retirement. Will your assets be protected in the event of a medical crisis requiring long-term medical care? Many people believe that Medicare will cover this cost but the reality is that it does only if you are income eligible. The average annual cost of assisted living is approximately $20,000 and nursing home costs an average of $52,000 per year with the average stay being 2.6 years. That cost is projected to increase to $190,600 by the year 2030. Long Term Care insurance can provide protection from the financial consequences a debilitating illness.
Life insurance can be used to cover estate taxes, pay taxes on retirement distributions as well as protect your family from financial disaster upon your death. Before you decide to integrate life insurance into your retirement plan, you must gain an understanding of the many different types of life insurance available as well as how much you may need and how it will work upon your death. Donít rely on sales tactics from unreliable sources to provide you with the best advice. An unbiased approach from a qualified financial advisor can help to avoid purchasing unnecessary coverage as well as ensuring that your family is adequately covered.
Adequately account for rising health care costs
Health care costs are rising at a rate about three times faster than inflation. At the age of 65, most people are eligible for Medicare insurance but unless your employer provides some type of supplemental insurance, you are responsible for costs not covered by Medicare such as annual co-pays, deductibles and prescriptions. How will you pay for these added expenses? Without careful planning, these costs could easily begin to erode your retirement savings. A financial planner can help you by incorporating these costs into your retirement plan as a whole.
Plan for the retirement that you want and you deserve
Retirement planning is more than just saving and investing. Itís also about enjoying yourself doing what you want to do. You should start thinking about what you want to do, where and how you want to live and how you will sufficiently plan to make those dreams a reality.
A financial advisor will work with you to ensure you have covered all aspects of retirement planning. Few people can invest the time it takes to learn everything there is to know about the various insurance products, tax strategies and benefits, estate planning and so on. To gain a comprehensive understanding of the complexities of the stock market requires proper education, training, and experience that is expected of a qualified financial professional. There are literally thousands of articles and free advice available at our fingertips about retirement planning but how much of that ëadviceí is biased, not suited to your needs or just plain incorrect? Each person should have a unique retirement plan that reflects the needs of his or her particular goals and financial situation. An article is one-sided and cannot develop an understanding of your specific goals, evaluate your current financial situation and incorporate those factors into a comprehensive retirement plan.
A qualified financial advisor can provide an unbiased approach geared toward making your retirement dreams a reality.