Five Questions Every Senior Should Ask When Planning for Retirement

If you’re a baby boomer and starting to look toward your retirement, the view is much different than it was for your parents.

The dream of retiring at age 65, benefiting from Social Security and relaxing through your golden years after decades of hard work is no longer a reality for many seniors. The reasons for the change are both good and bad.

On a positive note, Americans are living longer than ever, with more years to spend with family and on the activities they love. At the same time, healthcare and long-term care costs are skyrocketing, the retirement age keeps getting pushed higher, and the country is starting to settle into a recession. In fact, the intersection between longer life expectancy and reduced benefits means that a couple who retires at 65 with $1 million saved has a 72 percent chance of running out of money before they pass away.

As you begin to look toward the future, it’s important to address the biggest financial questions today’s boomers have to face.

How long should I expect to work? Currently, for those born after 1955, the age you can begin receiving full retirement benefits is 66 years and two months. For those born after 1960, that age is slowly creeping up to 67. However, many employees are already working beyond 65 because 1) they enjoy their job, or more likely, 2) they can’t afford to retire. In one study, 40 percent of baby boomers surveyed said they planned to work until they die because of financial constraints.

Many advisors suggest waiting until age 70 to retire or to claim Social Security benefits in order to receive the maximum possible benefit. Or, if you do retire from a full-time job, you may want to consider a consulting position or part-time job to cushion your income.

How much do I have saved? On average, a single retiree can expect to receive $14,000 in Social Security benefits each year, which if you lived on as your only source of income, would put you just slightly above the federal poverty level. Unfortunately, 45 percent of boomers have not put anything back to supplement their benefits. If you do not have a 401(K), IRA or, for the very lucky few, a company-based pension plan, consider making saving for retirement your top priority. If you start putting $500 a month into an investment account at age 50, you could retire at 65 with $145,000 in the bank.

How much should I expect to live on in my retirement years? Any strong financial plan starts with a detailed budget. Provide your retirement planner with all of your expenditures for the month, including housing, cars, utilities, and credit card payments. From there, you can work together to see how far your estimated retirement savings and Social Security payments will stretch for the next 20 years. When you have a solid picture in mind, you can start making smarter choices for your future, whether that means paying off debt before you retire, downsizing your home for something more affordable, or putting more money into your IRA.

How will my health impact my retirement? In a study by Merrill Lynch, Americans over age 50 said paying for healthcare costs in retirement was their greatest financial concern—even among the wealthy. One way to maximize your healthcare coverage is to stay on your employer’s plan for as long as you can, even if you have to work an extra two or three years.

In addition, while many healthcare services are covered under Medicare A, which is available to all seniors, you may need to also look at opting into Part B, which covers doctor visits and outpatient care with an additional premium, and Medicare Part C private insurance plans that assist with vision, dental and prescriptions. However, the best way to avoid unexpected healthcare costs down the road is to start living your healthiest lifestyle today—get regular check-ups, eat a healthy diet and slip in daily exercise whenever you can.

How will I pay for long-term care when I need it? While Medicare Part A will help cover some, and Medicare Advantage will assist with non-medical home care, Medicare does not pay for room and board or personal care in an assisted living facility. Long-term insurance can be a financial lifesaver in the event you need to be placed in extended care due to aging, injury or illness. Most long-term care policies have some home health coverage. In fact, many of the individuals we serve are able to use their long-term care policy with AccuCare Home Health Care of St. Louis. Once you get past the age of 60, finding a long-term care policy can become extremely difficult and expensive, so it’s essential to enroll in a plan early.

As always, the best way to determine your future financial health is to discuss your goals with a St. Louis retirement planner. Whether you want to travel the world, spend your days volunteering in your community or simply want to relax in the home you love, they can help you build a plan that takes into account all of the factors that may impact your financial security.

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