Retirement is a balance between enjoying your golden years, taking good care of your health and balancing your finances, so you don’t run out of income too early. However, as reported by MD Magazine in the recent article “Four Big Retirement Threats and How to Protect Yourself,” there are challenges ahead, some of which you can control, others requiring preparation.
Threat One: Premature death of a spouse and loss of Social Security or pension income. The loss of one Social Security check can have a significant impact on the household’s income. This is also true with the loss of a private pension. Both spouses need to be aware of how their retirement income will be generated and what will happen, when one spouse passes away.
Life insurance can be used to make up for the lost income. If you are young enough, buy term insurance. If you are older, consider cash-value policies, like whole life. Make sure that both spouses are familiar with household finances. Put together a list of your checking, savings, investment and credit card accounts.
Threat Two: Healthcare Costs. Medicare simply does not cover everything. Even a Medicare Advantage plan doesn’t cover everything. That includes long-term care, dentistry, vision care, hearing aids, eyeglasses or private nursing. There’s a “donut hole” in prescription coverage, so if you need pricy drugs you’ll need to budget at least $5,000 annually. If you underestimate the cost of healthcare, you could go through your medical budget fast.
Perfect health at 55 is no guarantee for what’s to come.
One solution is making the most of a Health Savings Account (HSA). You can save for future medical expenses and get a tax deduction for contributions. Even better—there’s no income tax on withdrawals for qualified medical expenses. Check with your employer, since HSAs are usually part of an employee benefits plan. You must have a high-deductible heath plan and can’t be on Medicare to qualify for an HSA.
Threat Number Three: Inflation According to the U.S. Bureau of Labor Statistics, inflation has averaged about 4% annually over the last 50 years. In 20 years, today’s $1 will be worth only 46 cents. Make sure your investment portfolio is diversified. Remember that your retirement could last several decades, so it may not be wise to abandon equities during retirement.
Threat Number Four: Outliving Your Savings. This sounds like a good problem, but it is still a problem. The longer you live, the longer you are expected to live. According to the IRS life expectancy tables, a 30-year-old can expect to live to age 83. However, if you are 65 years old now, you can expect to live until age 86. The solution is to do periodic planning to make sure your retirement accounts and investments are keeping up with your living expenses. Give yourself a cushion, in case you live far past your expectations.
To protect your family in case of a sudden death, make sure you have an estate plan in place. An estate planning attorney can help you set up an estate plan that works for you.
Reference: MD Magazine (Aug. 2, 2018) “Four Big Retirement Threats and How to Protect Yourself”
退休是享受的黃金歲月，與照顧好自己的健康和平衡財務之間的一種平衡，所以你不要過早地用盡收入。但是，正如MD Magazine在最近的文章中所報導的那樣“Four Big Retirement Threats and How to Protect Yourself,” (四大退休威脅以及如何保護自己) 未來有挑戰，其中一些是你可以控制的，另一些是需要準備的。
威脅二：醫療成本。聯邦老人保險(Medicare)並不包括一切。即使是優化聯邦老人保險(Medicare Advantage Plan)也未包括所有內容。例如長期護理，牙科，視力保健，助聽器，眼鏡私人護理和一些處方藥物。如果你需要昂貴的藥物，你需要每年預算至少5000美元。如果您低估了醫療保健的成本，您可能會很快用完所有醫療預算。
參考: MD Magazine (Aug. 2, 2018) “Four Big Retirement Threats and How to Protect Yourself”