According to a recent Gallup study, more than 50 percent of Americans are concerned that they won’t be able to fund their retirement. In fact, retirement is America’s No. 1 financial worry.1 If you’re one of the many Americans who is worried about retirement, you have company.
Fortunately, it’s never too late to take action. With focused planning, you can take back control of your retirement. Below are a few red flags that may indicate you’re not as prepared as you should be. If these sound familiar, now may be the time to develop a plan. You also may want to meet with a financial professional. They can help you implement a retirement strategy.
You haven’t estimated your retirement income.
To meet your desired standard of living, you’ll have to generate enough income to cover your needs and also keep up with inflation. That is often the most difficult part of retirement planning. While you may be able to count on income from Social Security and even pensions, much of your income in retirement may have to come from your personal savings.
Do you know how much income you can expect in retirement? If not, it’s difficult to know whether or not you are on-track. You can obtain an estimate of your Social Security benefit amount from the Social Security Administration. If you have a pension, your employer should be able to provide a projected payment amount.
It may be more challenging to project income from your savings and investments. A financial professional can help you develop a savings and investment strategy and then estimate a reasonable withdrawal amount that you can take each year.
You don’t know how you will pay for health care costs.
Many retirees assume that Medicare will cover their health care expenses. Medicare is a valuable resource, but it doesn’t cover everything. In fact, you could face significant out-of-pocket expenses in retirement. Fidelity estimates that the average retired couple will spend $280,000 on out-of-pocket medical expenses.2
Now is the time to consider health care funding strategies. You could fund a health savings account (HSA), which is a tax-favored tool to pay medical costs. A long-term care policy may also be a wise decision, as Medicare usually doesn’t cover in-home assistance or stays in assisted living facilities. If you don’t have a strategy, health care costs could blow a hole in your retirement budget.
You’re struggling with debt.
Debt is a problem for many Americans. However, it’s especially challenging for retirees. If you have to make payments on debt in retirement, you may have less money available to fund your lifestyle. You also may be forced to drain your retirement assets to keep up with debt payments.
Take action to get your debt under control before you reach retirement. Develop a budget and look for ways to pay down your debt quickly. Also, consider options to reduce your interest rate, such as a consolidation or even a home equity loan. If you can eliminate debt before retirement, you may find yourself on more solid financial footing.
Ready to eliminate the red flags in your retirement planning? Let’s talk about it. Contact us today at Legacy Retirement Services. We can help you analyze your needs and implement a strategy. Let’s connect soon and start the conversation.
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
17696 - 2018/5/30
Terry L. Tyler