You need to do more than open a savings account to prepare for retirement. There are many factors to consider and tasks to accomplish to ensure that you can enjoy your golden years comfortably.
Here is a checklist for your retirement planning strategy:
Think about your longevity
Don't sell your life expectancy short when considering how much you need to save to sustain yourself through retirement. Modern medicine and other factors are allowing us to live longer, meaning that your nest egg will need to stretch further after you exit the workforce. This also means that you'll have to factor in inflation for more years and think about how your longer life works with any distribution requirements of your account that are tied to your age.
Keep your spouse informed
Even though you may not share your retirement savings account with your spouse the same as a joint checking account, it is important to keep him or her aware of your financial standing, goals and plans for your golden years. Remember that you're creating a future together, so both of you need to play a role in the decision making.
Also, keeping your spouse in the loop is helpful to him or her in the event of your death. Having clear communication about all accounts, trusts, wills and insurance policies will make the estate settlement process much easier for everyone involved.
Factor in health care
People are living for longer on average, but that doesn't mean you shouldn't consider the costs of health care when planning for retirement. Medicare has specific age-related deadlines for open enrollment, and each plan provides a different level of coverage. Take some time to understand Medicare parts A, B, C and D and what this federal health insurance program doesn't cover. For example, financial assistance for long-term care is not guaranteed by a policy, so you may need to enroll in long-term care insurance to avoid exhausting your funds.
Choose a retirement location
Whether you're planning to kick back on the sunny beaches of Florida or recline in a nice bungalow in South America, you need to know where you want to live after you retire. Not only are you deciding whether your new home will have the amenities that you want to enjoy during all your free time, but you also have to factor in financial aspects. If you plan on buying a new home, are you going to look to home loans for financing or pull from your savings?
Maybe you prefer to stay in your current home where you watched your children grow. Many Americans feel this way, and you may be able to stretch your nest egg further if your home is completely paid off.
Determine your number
Figuring out how much you want to save for retirement requires patience and precise calculations. You also think about the aforementioned costs and how you plan to spend your time during your golden years. Develop a budget for your expected expenses at that time. By looking at your annual costs, you can determine how much you'll need to pay your bills and have some money left over to enjoy yourself.
Get help from a professional
Your spouse isn't the only person who can help you plan for retirement. Speak with one of our qualified retirement specialists for help with developing a step-by-step plan to maximize your savings, create a solid financial plan and gain peace of mind.
For more information on effective wealth management strategies, contact Landmark Bank.
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