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Archive for the ‘Seniors’ Category

How Do I Get Health Insurance When I Retire?

How Do I Get Health Insurance When I Retire - How Do I Get Health Insurance When I Retire?

If you’ve held a stable job for your professional career, it’s most likely you haven’t been required to think much on your health insurance. However, when you retire, it’s a whole new world full of options you need to be sure you understand.

Find out about Your Existing Health And Wellness Benefits

The very first thing to do is learn everything about your existing medical insurance coverage benefits and how they change in retirement. Larger companies may sponsor workshops that help you plan for insurance as you transition into retirement. Smaller companies may work with benefits advisors who also offer this sort of training or who may have other information you can leverage to make informed decisions as you move forward.

Discover Your Options

If you are retiring prior to age 65, you can’t be rejected for insurance protection for pre-existing conditions due to the Affordable Care Act. When you’re age 65, most are eligible for Medicare. And with Medicare there are many choices to make. It’s important to learn all you can about the various parts of Medicare and your options for dealing with them.

As you evaluate your options, be sure to incorporate your approximated healthcare expenses into your retirement budget plan. Just how much should you plan for? It depends on your insurance coverage protection. Usually, financial strategists suggest setting aside $10,000 per year per individual to cover out of pocket costs, dental, and so on,

Talk to a “Medigap” Insurance Specialist

Medicare is limited in its protection. “Medigap” insurance fills in where Medicare leaves off. Such insurance may be a part of your retirement benefits with your employer but for most individuals, you’ll need to talk with a specialist to secure this added protection.

We’re here to help. As you have questions we can help you find answers and connect you with resources to help you. Please reach out so we can help you explore your options!

Ways to Cut Spending in Retirement

Ways to Cut Spending in Retirement  - Ways to Cut Spending in Retirement

When you retire, depending on the retirement plan you put in place, you may find yourself with less disposable income than you once had. While this is not an issue for some people, many of us need to find ways to cut our spending when we retire, and here we offer you some tips on how to do so!

Pay off your mortgage

As with any loan, you pay a significant amount of interest on your mortgage, meaning that you effectively lose more money than necessary. If you have enough savings to pay off your mortgage without being completely broke afterward, you might want to consider doing so. Not only will you no longer have any monthly mortgage payments leaving your account – you’ll have a load off your mind as you relax in your property and know that you own it… fully.

Downsize your house

If you have kids and they have since moved out of your home, chances are that you have a multi-bedroom home of a decent size which is designed to accommodate a family. If, however, there is now only 1 or 2 parents living in the multi-bedroom home, it could be costing you too much in maintenance and upkeep for essentially no good reason. Moving to a smaller house could not only reduce your maintenance costs, it may allow you to make a profit from the sales (assuming the smaller house is cheaper), which could nicely bump up your retirement fund.

Travel off-peak

Lots of people travel during their retirement, and who can blame them? However, if you are going to travel around, be sure to do it off-peak. As a retiree, you have the freedom to go on vacation whenever it suits you, meaning you can travel at the times of year when the costs are down because the vast majority of people are busy working or taking their kids to school.

Move to a lower-cost area

If you want to keep a similarly-sized house but move to a cheaper area, consider moving further away from metropolitan areas and into cheaper suburbs. You may even decide to move cities or states altogether, opting for a part of the country where your existing money will travel much further than it does now.

If you’re looking to retire soon, you’re probably thinking about your insurance and financial planning. Why not speak to one of our insurance advisors and see what they could do for you today?

Exercise Will Improve Your Memory!

Exercise Will Improve Your Memory  - Exercise Will Improve Your Memory!

A recent study from the Brigham Young University (BYU) has found that regular exercise is able to safeguard the brain from the negative effects of longtime stress. The study has suggested that the hippocampus – the area of the brain which deals with memory – strengthens if you exercise regularly. Put simply, it appears that regular exercise reduces the effects that stress has on your brain.

You see, well-functioning and healthy brain cells are able to easily transmit messages via your neurons, with your memories becoming more vivid and strong when your neurons are able to transfer these messages more quickly. However, as you become stressed and your brain tissues inflame and/or swell up, the speed of these neurons slows down, meaning that your memory becomes poorer and poorer with time.

However, when you perform cardiovascular exercise, you are increasing the rate at which blood flows around your body. This also affects your brain, meaning that more blood flows to your brain during exercise. This, put simply, strengthens your hippocampus and causes your memory to improve. The exercise can even increase the size of your hippocampus, making it even better and more efficient than it was before!

Exercise and mood

It’s a well-known fact that exercise triggers feel-good hormones such as endorphins, meaning that you naturally feel happier and less stressed after exercise. Although anti-depressants may aim to achieve similar effects which limit depression and anxiety, exercise is just as good (and often better) than taking antidepressants alone. Not only does exercise tend to release more endorphins than anything found in a pill – you’re also getting fitter, healthier, and a better memory while you’re at it too!

Emotions and memory are undoubtedly linked, with your most emotional moments having much stronger memories attached to them. It’s probably easier to recall moments of great sadness, joy, and anger in your life than it is to recall moments of boring mediocrity.

Anxiety is a condition which means that your body is constantly prepared for “fight or flight”, with a never-ending sense of fear and dread remaining over you whatever you do. This leads to a form of chronic stress, something which BYU’s study claims will make your brain’s synapses more effective. Fortunately, exercise is the best (and most natural way) to relieve general anxiety while also improving your brain’s memory and functioning. Studies have shown that when stress-prone people exercise, their brain tends to no longer be impacted negatively by their stress levels.

How much exercise do you need to improve your memory?

You don’t need to be a gym rat in order to improve your memory; you just have to make an effort! At least 150 minutes of exercise every week is enough to improve your memory and keep your brain healthy, and 150 every week is relatively easy to fit in across a week. If you can’t handle this much straight away, start small and go harder in time. At the end of the day, any exercise is better than no exercise.

It also helps to make exercise as fun as possible so that you don’t dread it as much. For example, listen to your favorite playlist or podcast while you run, or perhaps clean your house while dancing around and learning some new moves… whatever you can do to make it bearable. Your body and your brain will thank you!

Are you looking to improve your memory and ensure that your health stays optimal as you get older? If so, you may also have life insurance on your mind, as well as other insurance-related questions. If this sounds like you, give our team a call today and you’ll receive top-tier advice from some of the best insurance specialists in the country.

Managing Investing Risk in Retirement

Managing Investing Risk in Retirement  - Managing Investing Risk in Retirement

When you’re looking to save a nest egg for retirement, you need to make sure that you manage your investment risk carefully. On the one hand, you want to try to maximize your returns down the road, yet on the other hand, you need to make sure that your investments aren’t going to leave you broke when you’re too old to work anymore. It’s certainly a tricky balancing act.

Setting aside savings from your salary is undoubtedly tricky, so your best plan for retirement is to earn high returns on savings without acquiring too many stocks and watching the stock market frantically like a panicked hawk. However, once you’ve actually retired, at least for most people, the plan is to maintain the savings for as long as possible, rather than keep growing them further.

Safe portfolios

When you’re younger, you can afford to take more risks with your portfolio because you most likely have income coming in from a salary. Although in your retirement you may have some sort of pension income, it’s not likely to be as much as a salary, and as a result you need to consider investing in very safe portfolios. Stability and predictability are your best bet as you retire, and if you’re going to opt for some risky investments, you’d better make sure you have a diverse range of safe investments in order to back it up.

Some personality types may not be too worried about investment risk, finding it exciting or interesting. Most of us, however, want to be secure and know that we won’t end up on the streets if the stock market suddenly crashes overnight.

The Warren Buffett Retirement Portfolio

The Warren Buffett Retirement Portfolio is a common investment strategy for retirees which suggests that you invest 90% of your savings into a Standard & Poor’s 500 index fund and the last 10% into government bonds which are short-term. However, this is quite misguided, as a 9/1 ratio of stocks and bonds could see a retiree running out of money over the long term, especially if they maintain their health for many years to come.

On the other hand, if you do opt for a very safe investment approach, you still have to consider how you’re going to make it work. Even if you’re going for a very safe approach, we cannot always predict how the markets will behave, and it can nonetheless be difficult to ascertain and predict your returns. Ultimately, your stocks/bonds ratio could end up being more volatile than you imagined, leaving you with a degree of uncertainty about your investments and their returns.

The T Rowe Price Retirement Income Calculator

Nonetheless, perhaps you should use a tool such as the T Rowe Price Retirement Income Calculator, which will help you to calculate the mix of stocks and bonds that are able to support and help you with varying levels of withdrawals throughout your golden years. Using the calculator, you should be able to determine the stocks/bonds mix which is best for you and your future, leaving you with an acceptable level of risk. Put simply, you need to be able to weather the storm should things go awry on the markets.

Limiting yourself to a reasonable withdrawal rate, for example 3% or 4% initially, allowing room for inflation, you should be able to allocate a diverse range of stocks/bonds which help you to maintain a nest egg for a good 30 years or so. Of course there’s always the fear of running through your savings too soon, especially when you have little income coming your way, but by being savvy, calculating your risks, diversifying your portfolio, and using calculators such as this to help you out, you should be able to prepare your retirement funds effectively.

The bottom line

When coming up with your retirement investment plan, you need to be incredibly flexible. For example, perhaps it may be a good idea to invest more heavily in stocks while still carrying an acceptable level of risk. Or you may for example decide to use a portion of your savings on an immediate or longevity annuity, guaranteeing yourself a form of income in addition to Social Security, thereby giving yourself a safety net if things go awry with the markets… as they often do.

Looking for help with insurance for your retirement? Speak to a dedicated member of our team today!

The Insurance You Need After Retirement

The Insurance You Need After Retirement - The Insurance You Need After Retirement

After you retire, you need to make some major changes to your life, apart from the obvious ones. After you stop working for good, you’re likely to find yourself with new pastimes, new spending habits, new routines and perhaps even a new home. As a result, you need to remember that your insurance coverage is probably becoming less and less adequate, so you may need to update or change your insurance policies in order to reflect your new retired life.

Financial planner Benjamin Sullivan recommends that seniors shouldn’t rush to cancel their insurance, but should have a serious think about their future and insurability. He explains:

“There isn’t a one-size-fits-all answer. The standard wisdom might be the exact opposite of what’s best for the specific individual.”

There are lots of ways your insurance policies could change after you retire, but here are some very important ones to think about!

Medical insurance

As retirees age, it’s obvious that they need some decent medical insurance. Older people tend to require more medical treatments and drugs, meaning that their medical bills will soon pile up if they don’t have a good health insurance plan in place. Also, according to the ACA, basically every US citizen must have health insurance or face potentially devastating fines.

Luckily, most senior citizens who are 65 or older are eligible for Medicare coverage, while those who are still employed may have similar benefits through their employer’s employee health plan. Although it’s good that Medicare exists, it can be better to stick with your private health insurance plan, so be sure to bear this in mind and draw some comparisons.

If you don’t want to apply for Medicare when you reach 65 because you have a private policy in place, be sure to inform the authorities that you will be waiving your right to Medicare. If you forget, you could face a fine for “late enrollment” despite not having plans to enroll in it at all!

Renters or homeowners insurance

Renters or homeowners insurance protects your possessions within your home and also gives you liability coverage too. If you’ve bought some new items in your retirement, such as expensive jewelry, it may be worth taking another look at your renters or homeowners insurance.

Auto insurance

As you get older, you may find that your auto insurance premiums rise due to things such as eyesight problems or hearing problems. If this is the case, it may be wise to worth with an insurance broker who can get you a competitive deal for your age.

Need help with new insurance policies after retiring? Get in touch with our team today!

Retiring Soon? How To Plan For It.

18 07 S Retiring Soon How To Plan For It. - Retiring Soon? How To Plan For It.

Although retirement advice normally centers around doing some new hobbies or going on a dream vacation, attorney Natalie Choate thinks that new retirees should slow down and get the boring stuff out of the way first. She states:

“Take a minute or a rainy weekend and do something boring. Find and organize all your retirement plan records. You can save yourself and your heirs a lot of trouble (and money) just by doing some paperwork.”

Although it’s not the romantic version of retirement, she certainly has a valid point. These days, people are more responsible for their own retirement funds, what with 401(k)s and IRAs which need to be carefully managed in order to extract their full value. This shift toward non-private pensions means that retirees need to be more financially savvy when it comes to their retirement fund.

Investments and stocks

If you’re looking for a decent retirement nest egg, it’s important to make some smart investments. A smart investment strategy, particularly one which operates via automated withdrawals to tax-deferred retirement accounts (like your 401k) can help you to easily build up funds in a low-risk and low-tax manner. Although the stock market is inherently volatile and there are fears of another 2008-esque crash, the stock market’s current state means that many stocks are “on sale” and are thus more affordable for people looking to secure their future retirement finances, regardless of their age.

Of course, you should always be wary of the stock market if you’re nearing retirement, as a steep market pullback could obliterate your savings if you are drawing down your portfolio. This risk could be mitigated by using cash, but experts recommend taking a middle-ground approach at the moment due to unimpressive cash yields. Robert Westley, VP and Wealth Advisor, explains:

“During bull markets, like the one we have been experiencing, clients often forget the importance of holding fixed income in their portfolios. Investors should utilize prudent asset location planning when determining where to hold their target equity and fixed income exposure”.

He goes on to explain that asset location planning requires considering the different tax characteristics of asset classes and their accounts/vehicles where they are held. Doing this helps you to gain an improved after-tax return rate, which is ideal when trying to save up as much as possible.


Social security

Despite changing measures and tax reform, retirees’ dependence on social security remains high. Luckily, favorable taxation policies and inflation protections are helping to keep social security a strong cash flow source for retirees, guaranteeing them payouts until the day they die.

Furthermore, regulations on mixing social security with regular retirement accounts and savings have been relaxed in recent years, allowing you to still receive social security money from the government while harnessing your own financial power and retirement savings.

Taxes

Ed Slott, a CPA from New York, states: “Taxes are the single biggest factor in how much you can spend in retirement.” As tax reforms have begun pressuring states to tax their citizens more than ever before, retirement income becomes a big issue for those who no longer have the capacity to work. State and local tax (SALT) deductions are still capped at $10,000 per year in some states, which may make them attractive states for people to retire to if they want to minimize their tax liability and financial burden in their older age. Slott explains the complications of the current tax system for retirees:

“The IRS recently explained that conversions from 2017 can be reversed, completely or partially, until this Oct. 15. From now on, this type of recharacterization won’t be allowed.”

This means that your IRA conversions should ideally be processed late in the year, as then they will be able to grab a lower tax rate. New tax laws also mean that federal estate tax exemptions have been increased to roughly $11 million, leaving many retirees with less to worry about when it comes to planning their estates for their loved ones.

Planning for your retirement is inevitably a complicated and multifaceted process, requiring financial knowledge in multiple areas. If you’re looking for help with planning your retirement effectively, contact us today for bespoke advice.

Retiring in 2018? Do This First.

Retiring in 2018 Do This First. - Retiring in 2018? Do This First.

If you’re thinking of retiring in 2018, here we suggest a few things which you should consider carefully before deciding to close the working chapter of your life for good.

Consider whether your savings are adequate

As our life expectancies continue to lengthen, it is more important than ever to do the math and make sure that you have enough money to support you for many years or even decades into the future. You could do this, for example, by getting an annuity, which acts as a sort-of post-work salary that you receive on a regular basis. You could also use the IRS Required Minimum Distribution (RMD) tables to help you, with these RMD tables specifying the amount of money you have to withdraw from tax-advantaged retirement accounts every year starting at the age of 70 ½. This method is more responsive to market fluctuations than some other methods, making it ideal.

When deciding whether your savings are adequate, be sure to take absolutely all of your expenses into consideration. As well as your bare-bones living costs and bills, be sure to consider things such as healthcare, food, vacations, gifts, and more. You may have to allocate more money for casual spending than you do right now, as many retirees suddenly find themselves spending money more easily in their free time, despite their best intentions to be thrifty. It’s easy to get bored and spend money when you’re retired, so don’t forget this!

Find out whether you are entitled to Social Security

Most US citizens rely on Social Security as a major means of retirement income, although some may use it as an additional source of post-work income. The age at which your retire affects your Social Security benefit amounts, so bear in mind that FRA (full retirement age) varies according to your birth year due to changed policies. If you were born 1943-1954 then it’s 66 and if you were born in 1960 or later then it’s 67.

Retiring before FRA is possible, but your Social Security benefits will be reduced by 5/9 of 1% per month up to 36 months early. It will also be reduced by 5/12 of 1% per month beyond 36 months early. You can claim Social Security benefits as early as 62, but you’ll receive considerably less income than if you retire at FRA or even later, with people retiring at 70 maxing out their monthly checks. The longer you wait to retire, the more you’ll receive in benefits, but this isn’t necessarily the right choice for everyone.

Think about your healthcare costs

Unless you plan on moving to Canada or Europe sometime soon, you’re going to have to think about your healthcare costs as you age. Although Medicare can help you if you’re 65 or older, there is a cornucopia of healthcare costs which Medicare doesn’t cover, such as eye/ear care and nursing home fees. Seniors also face sky-high premiums on insurance policies due to their age, so bear this in mind too. It may be worth looking into Obamacare to help with your healthcare coverage.

Assess your tax situation

You are still taxed when you take money out of your retirement accounts, so be sure to plan for this. The only exceptions are funds coming from a Roth 401(k) or Roth IRA. Recent tax reform passed in 2017 has made changes to tax rates and tax deductions, so it’s important to assess your complete tax liability following your retirement. For example, depending on your income, your Social Security checks may be taxable up to a certain degree, so be aware of what’s going on.

Have a plan

Although you probably want to rest up a bit, retirement shouldn’t be seen as an empty void of time! It’s important to think about how you’re going to keep yourself entertained and socially plugged in, with loneliness and boredom being major problems for a lot of retired people. Retirement may be a good time to join some clubs and take up some new hobbies, keeping your life engaging and interesting!

If you’re thinking about retiring but aren’t sure, speak to a member of our team who can offer you advice on taxes, insurance, income, and much more.

Retirement Planning Mistakes You Need to Avoid

Retirement Planning Mistakes You Need to Avoid - Retirement Planning Mistakes You Need to Avoid

Retirement can seem like it’s lightyears away, but the decades can creep by faster than you might suspect. As a result, it is imperative that you start planning for your retirement sooner rather than later. Here are some retirement-planning mistakes that you need to avoid at all costs!

1. Waiting

According to the American Psychological Association, finances consistently ranks as the #1 stress-inducing factor of US citizens’ lives, and this is something which is unlikely to go away with age. As a result, it is important to plan for our financial futures sooner rather than later. The key is to make decisions now that your future retired self will thank you for. Whether it’s setting up your 401k or meeting with a financial advisor to discuss savings, don’t wait to start planning for your eventual retirement safety net.

2. Being unrealistic

Making a retirement plan is difficult when you’re relatively young, as you have to make lots of assumptions about your financial future and your projected cash-flow for the next few decades. Although it’s easy to assume that you’re going to put away X amount of money every month for 30 years, there will always be unexpected expenses and costs that crop up in your life, whether it’s a new car, new house, or a yearly vacation. It’s also important to take inflation into account and consider making wise investments in order to curb this problem.

3. Forgetting about your quality of life

When talking about your future finances, it’s inevitably important to crunch the numbers and spit out some cold, hard statistics. We might want to maximize our savings over our lives and live as thriftily as possible, but is that the way you really want to live your entire life? Avoiding vacations and treats could save you a lot of money, but you could throw the best years of your life away by living like a pauper and not enjoying yourself. Be sure to allocate some money for fun and enjoyment – life is short and it should still be enjoyed to some degree!

4. Spousal disagreements

Before you start planning for retirement, be sure to talk to your spouse about your future retirement and what you envision for yourself and them too. It’s better to have these conversations early and strive toward mutual goals which you can work toward and both be happy with. If one of you wants to work until the day you die, now is the time to address this issue and ensure that you are both happy many years into the future.

5. Overlooking short-term goals

Of course, retirement is a very important aspect of your financial planning, and it is undoubtedly the one which stretches out the furthest into the future, making it seem rather daunting and omnipresent. Despite the presence of retirement looming over you when you look into your finances, it’s also important to plan for your own short-term financial and personal goals too. Short-term goals obviously depend largely on your lifestyle and future plans, but should be taken into account nonetheless.

For example, if you plan to have children in the near future, you can bet that you’re going to be making numerous shorter-term financial goals which focus on raising your children and putting money away for their college tuition in 18 years’ time. Mortgages and auto expenses are also other important short-term factors, and of course, you need to have a “rainy day fund” for things such as medical issues and crucial home improvements.

Furthermore, as mentioned previously, you need to set some money aside for enjoying yourself and having some fun in your day-to-day life! Just because you want to save up for your retirement fund doesn’t mean you can’t put some money away for that dream vacation you keep thinking about. Even if you retire wealthily, wouldn’t you prefer to look back on your life and know that you enjoyed it?

Saving up for retirement is a long-term plan which likely needs re-assessing from time to time as things change and the economy adapts. If you need help with your retirement fund and making wise decisions, why not give one of our team a call today?

Revealing the Secrets for the Best Retirement Now

18 05 S Secrets for a Better Retirement Now - Revealing the Secrets for the Best Retirement Now

Retirement is one of the biggest lifestyle changes that you’ll ever go through. Going from a committed timetable of work to having your days free, is a major adjustment.

Thankfully, there are endless ways to make full use of your time during retirement, and even change your financial situation.

Take a look at our top three ways to unleash the potential of your retirement in 2018:

 

Treat Yourself to the Trip of Your Dreams

One of the best ways to start your retirement off right is to take the trip of your dreams, the one that you may have been planning for years but have never quite found the time to go on. A big trip is the perfect time to enjoy new experiences that you’ve always wanted to explore, be it snorkeling, skiing, sky diving, or just relaxing on the beach.

Of course, big trips don’t come cheap, and if you’re concerned about finances in retirement, then it’s worth making full use of the financial planning tools available. Using a financial planner can help you to stay on top of big expenses, like trips abroad, and make sure that you’re not spending more than what your budget allows.

 

Take the Time to Make New Friends

Retirement is something that everyone goes through, which means that there is going to be a lot of people in the same situation as you close by. Making new friends can stop the feelings of loneliness that many people go through when they suddenly find themselves adjusting to the changes to their daily routine, and naturally spending less time around other people.

There are multiple groups designed to help you make friends in retirement if you’re not sure where to start. Affinity groups can make it easier to meet new people and form close bonds through your retirement that’ll make the new lifestyle much more enjoyable and sociable. Websites like Meetup.com and volunteermatch.org, are wonderful places to check out.

 

Keep a Check on How Much You’re Spending

While retirement may mean an end to the 9 to 5 routine, it doesn’t mean that financial responsibilities and planning are also at an end. It’s normal to be concerned about spending during retirement. One of the best ways to combat the problem of finances is to start living off income generated through savings, rather than reducing your main funds.

For individuals that can’t survive solely off income generated, then a 4% annual withdrawal limit is the bar set to make sure that funds don’t run out later in your retirement. This means that avoiding certain big purchases can sometimes be a must.

There are multiple tools that can help you to evaluate your spending and make sure that you aren’t spending too much, but it can also be wise to reduce spending where possible. You can implement a spending plan to help reduce expenditure on things you might be paying too much for, like insurance coverage, hobbies that you no longer enjoy, and food costs.

If you need help making sure that your insurance coverage is right for you, or you want to try and reduce the cost of your essential insurances, then please give us a call today.

Is It a Good Time to Retire? Retiring in 2018 or 2019

18 05 S Should you retire in 2018 or 2019 - Is It a Good Time to Retire? Retiring in 2018 or 2019

Retiring gives you the freedom to go out and pursue your dreams and finally have the time to really enjoy yourself. However, it’s a big decision. If you’re considering retiring in 2018 or 2019, there are some major things that you should consider first.

Are Your Savings Substantial Enough?

The first big consideration is the size of your savings, and especially, how long they will be able to last. To work out whether your savings are substantial enough for you to be able to live on the income, and still have some spare to enjoy yourself, there are a number of methods that you can use:

  • IRS Required Minimum Distribution (RMD) Tables – From 70 ½ years of age, RMD tables will be able to specify the exact amount that you have to withdraw from your tax-advantaged retirement accounts on a yearly basis.
  • Annuities Shopping – Despite potentially high fees, annuities can give you a retirement income that is guaranteed. Picking an annuity, like a deferred fixed annuity, can help you gain a reliable retirement income.
  • Percentage-Based Rule – Using the 2.5% to 3% rule means that you withdraw that amount each year and increase for inflation. If you can survive on that amount, then your savings are likely to be the right size for retirement.

It’s worth taking a look at all of the different methods for calculating whether your savings are big enough. Many people spend much more than they were expecting in the first years of retirement, so it’s important to factor that it, as well as all the new expenses that you might not be used to paying, and those that you’ll no longer have to pay.

Does Social Security Factor into Your Retirement Plan?

Some people choose to use their social security benefits at the start of retirement, whilst others choose to wait. If you know that you’re going to need your social security benefits, that it’s important to really consider your retirement age.

If you retire after you’re 66 (for those with birthdates between 1943 and 1954), or 67 (if you were born after 1960), then you’ll meet the Full Retirement Age (FRA). Not meeting the FRA means that you’ll have to sacrifice part of your social security benefits. If you wait until you’re 70 years of age, you’ll have fully maxed out your social security benefits.

Can You Cover the Extra Costs of Healthcare?

Anyone who retired after the age of 65 is entitled to Medicare, but this doesn’t cover everything. From the cost of hearing aids to nursing homes, there are a range of things that Medicare won’t cover. Coinsurance costs and expensive premiums also have to factor into your expenses and budgets in retirement.

According to the Employee Benefit Research Institute, for a 90% chance of fully accounting for your costs for healthcare after retirement, you’ll need savings of about $370,000. High premiums may also have to be paid, even if you qualify for subsidized coverage.

How Does the Tax Situation Differ?

With the exception of funds held in a Roth IRA or Roth 401(k), withdrawals will still be taxed after retirement. It’s possible that up to an 85% tax rate will apply to your benefits, and you may have to pay tax on your social security benefits. When working out if 2018 or 2019 are the right years to retire in, it’s essential to work out how tax will influence your income and savings.

Is It the Right Time for You to Retire?

If you can safely say that your finances are in order and fully prepared for retirement, then 2018 or 2019 may just be the perfect time for you to retire. Still not sure whether your finances are in a suitable condition? If you’re worried about going into retirement, then it’s never too late to get your savings back on track for a worry-free retirement.

Always searching for ways to make your retirement easier? Call us today for advice and guidance about your personal insurances and how they might be different as you start considering retirement.