You’re in the home stretch. The time in your life that you’ve spent your career saving and planning for is almost here. Hard to believe, right? Well, all your hard work and dedication is something to be recognized, so congratulations are in order! Completing a career is an amazing accomplishment. But before you have one foot out the door, let’s take a look at some things that addressing now will serve you well in retirement (that was a party-pooper move, I know).
Downsizing your home
One thing retirees may consider is downsizing their homes. Fifty-one percent of adults over age 50 downsize to a smaller home in retirement. Aside from the obvious reason of not needing as much space, there are other advantages as well. Perhaps you want to move to a different climate. Maybe the stairs in your home are no longer your cup of tea. I myself would be happy with no more yard work. Oh yeah, and the potential added benefit of a lower cost! Lowering your housing costs will help you maximize your retirement income.
Collecting Social Security
I don’t blame you if you’re thinking, “It’s time to pay the piper!” when it comes to Social Security. When you decide to collect social security benefits will dictate the amount you receive so it’s important to carefully consider your timeframe. Collecting when you’re younger will decrease your payments so if you can hold off for a few years, you’ll be better off.
Retirement Savings Withdrawal Strategies
You were strategic about saving for retirement and you better believe you need to be strategic about withdrawing for retirement. Take into consideration all your sources of retirement income. Some are tax deferred, some are taxable and some are tax free. Make sure you know the tax implications of each account type when withdrawing funds.
Another thing to think about is long term care. Long term care is services for a person's health or personal care needs during a short or long period of time. These services help people live as independently and safely as possible when they can no longer perform activities of daily living (dressing, bathing, eating) on their own. Most of the time, this is done at home by unpaid family members, but it can also be given in a care center, nursing home or adult day care.
You can never know if you will need long term care. An unexpected illness or injury can change your needs suddenly. We’ll just put this out there- long term care is expensive. The cost of care could be several thousand dollars a month. Long term care insurance could be $2,000-$3,000 a month. Research your options for paying for long term care. If your income is low, it could be paid for by Medicaid. Otherwise, you could opt for long term care insurance, funding it personally, veterans benefits, or possibly through benefits provided by the Older Americans Act.
About 70% of Americans over the age of 65 will need long-term care services during their lifetime
Medicare/Medigap/Medicaid, Nice to Meet You
So many medi’s to keep track of. And we won’t sugar coat this- they’re all complicated. Gather information about Medicare and Medigap now before you retire. Medicaid is only applicable if you have qualifying income so if that will apply to you, find out the requirements and benefits offered in your state.
Your well-deserved retirement is just around the corner. Utilize these tips to make the most of your time and money.
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