A No-Nonsense Guide to Retirement Planning for Seniors

About 75 percent of Americans feel that the country is facing a retirement crisis. Many Americans aren’t prepared for retirement, with roughly 33 percent of the nation’s female population saying they have no retirement strategy at all. Overall, 55 percent of US workers say they plan to work in retirement.

These numbers are shocking, given the country’s rapidly aging population. Every day since 2010, 10,000 Americans cross the 65-year threshold, which is just two years less than the country’s retirement age for those born in 1960 and after.

For many people, retirement planning can seem a little terrifying. However, that doesn’t have to be the case at all. With this retirement planning guide, you can look forward to your retirement life with much more optimism.

Read on to learn more.

Speak With Your Spouse About Your Vision For Retirement

The first essential tip on how to plan for retirement is to have a conversation with your spouse about it. Too often, spouses have different visions for retirement. That’s why communication is so vital to ensure that both of you are on the same page.

Talk honestly and openly to your spouse about your retirement plans. It could be that your dream is to buy an RV and spend your retirement traveling across the country, while your spouse envisions a life at home spending time with family and friends. 

By having a candid conversation about your visions about retirement, you can begin to map out a fulfilling life together. senior care Brooklyn You can also begin to plan how you’re going to pay for the life you choose in retirement.

Make An Estimate Of Your Daily Expenses

Financial planning for retirement begins with having clarity about your current expenditure. One of the biggest worries for American adults is running out of money or having to drastically reduce their spending during retirement. By having a clear picture of your current spending, you can take proper action to start preparing for your retirement.

Make a list of what you spend on a daily basis. This way, you’ll be able to estimate what your expenses will be in retirement. The expectation is that during retirement, you’ll spend 55 to 80 percent of your pre-retirement income.

Factor In Your Health Care Costs

Your health care needs will evolve as you age. Deductibles, insurance costs, and copays may start to eat away at your savings. You may notice that out-of-pocket health care costs begin to increase.

While making your retirement plan, think carefully about how your future health care needs will impact your retirement savings. Determine what type of health care coverage will be most suitable, as well as the associated costs. This information can prove extremely valuable for your retirement financial planning.

Consider Your Retirement Housing Costs

Housing costs will take a significant portion of your retirement budget. Even if you’re considering spending your retirement in your current home or want to downsize, you’ll still need to dedicate a large percentage of your savings to your housing expenses.

Of course, you may also consider spending your retirement in a retirement community. A senior independent living near me can be the ideal option for you, especially once your children are all grown up, and everyone has moved out of your home. Whichever retirement housing option seems appealing to you, take the time to plan for the costs involved early enough.

Create A Retirement Budget

Once you have identified your expenses during retirement, it’s time to create a budget for them. Every budget is unique, so you want to be sure to customize your budget to your specific needs, wants, and goals.

Plan for both essential and discretionary items. Essential items include food, shelter, and clothing. Discretionary items consist of your wants during retirement, such as a waterfront house, traveling the world, and so on.

Plan For Your Retirement Investments

As a retiree, there are lots of options to draw income from. The primary source of your earnings will most likely be your retirement accounts. You need to closely track where your funds are invested and understand when and how you can draw upon these funds.

Get familiar with different types of retirement plans, including 401(k), 403(b), and 457(b). Others include pensions, a Thrift Savings Plan (TSP), and a traditional and Roth IRA.

Maximize Your Retirement Savings

One of the top reasons most retirees have to work in retirement is because they have too little or no savings when they retire. Having as much as ten times your last full year of working’s income by the time you retire is a good plan. If you’re behind on this target currently, start playing catch up right away.

The good news is that there are many options for Americans aged 50 and older to maximize their retirement savings. The IRS allows you to make catch-up contributions to various accounts, including SIMPLE 401(k), 401(k), 403(b), and IRA.

Minimize Or Eliminate Your Debt

A big part of your financial retirement plan should be to pay down or eliminate your existing debt. That includes your mortgage, auto loan, and credit cards. By reducing your debt, you get to free up your retirement funding. 

Take a close look at your budget and determine whether you can make extra payments right now. Doing so helps you pay down your debt faster. Begin with high-interest debts to benefit more from your payoff plan.

Retirement Planning Doesn’t Have to Be Intimidating

Everyone dreams of happy retirement life. The good news is that you can have this life, provided you set aside time for careful retirement planning. Discuss with your wife about your dreams for retirement, and lay down a solid strategy to achieve your goals when that time comes.

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