Have you begun making plans for retirement or do you keep putting it off? Failing to plan for retirement, including strategies for dealing with financial risk, can leave you vulnerable to financial struggles during a time in your life that should be care-free. You can retire with confidence if you begin the planning process a few years ahead. Here are a few considerations to add to your existing plan, or to help you get started on one.
What You Need to Know
Time: Make it Your Friend
Joan couldn't wait to retire and free herself from the day-to-day grind. However, two months into her retirement life, Joan realized she was bored. She found she was missing her usual zest and energy. Everyday was Saturday, just as she had dreamed, but she missed the hustle and bustle.
When it comes to retirement, try to imagine how you will use all the extra time you will have once you stop working. With lots of free time and nothing on your schedule, a person can quickly begin feeling lonely, left out and irrelevant.
To avoid Joan's scenario, begin to think about the things you enjoy doing in the limited amount of leisure time you have now. Could a hobby like oil painting or woodworking, for instance, become a full-time endeavor? If you don't have hobbies, what are some of the things you've always said you wanted to do? Learn Spanish? Earn a certificate in a new field? Become a chef? The key is to make sure you will stay active, set goals and schedule activities to do during the day that actually interest you. Retirement is a great time to try all the things you've ever wanted to do!
Social Security: Know When to Apply
Ralph waited until the week before he retired from his job to visit the Social Security office to sign up for benefits. He soon realized that he'd made a big mistake by not researching the appropriate time to apply, and he was overwhelmed with the paperwork and the many different benefits that are offered.
One major mistake to avoid while planning for retirement is not knowing when to apply to social security. There are many complex rules and options when it comes to Social Security, which can be confusing.
What should a future retiree plan to do? Speak to a Social Security representative or your financial planner a minimum of one year before you plan to retire. They can help you understand the complexities of Social Security. You should apply for benefits three months before your 65th birthday, or before you want to begin collecting benefits. The earliest a person can apply is at 61 years and 9 months of age.
Fraud Alert: Beware of the Scam
Maggie believed the nice young woman on the phone was calling from her bank. She told Maggie she thought her credit card number had been used by someone else and just needed to verify the account number. Maggie gave her the card number, only to find out later that the caller used it to charge more than $2,000 on her account.
It's a sad fact, but scammers target seniors far more than any other group. So it's crucial to avoid being taken by these smooth talkers. Scammers often take advantage of older adults because of higher rates of dementia and poor health. In fact, the majority of fraud victims are between the ages of 80-89.
In this situation, what should a retiree do? They should understand that many thieves pose as telemarketers or legitimate business representatives. Make sure the offer is legitimate before you accept prizes or sweepstake winnings, if called about over the phone. If the person over the phone asks for a social security number, it's more than likely a scam. It is a good practice to never, ever provide personal information like credit card numbers, social security and bank account numbers to anyone over the telephone.
Planning for Income: Make it Go the Distance
John thought retiring at 62 was the right path for him. He had saved money and had what he considered to be a good cushion. But five years into retirement, he began to realize his cushion was being depleted more rapidly than he had originally planned. His Social Security check helped meet expenses, but he realized that had he planned for inflation and unexpected expenses, his cushion could have kept more of its stuffing.
Often times, many people just plan around their income from Social Security, and don't account for the possibility of inflated living or emergency expenses, making this a very important mistake to avoid.
To make sure your money will last a lifetime, consider the impact of inflation and emergency costs when projecting your living expenses over several decades. If you're counting on working part time after retirement, make sure you consider how illness or an unexpected disability will impact your finances. Income from work may only last for only a few years after retirement. Meeting with a financial planner before retirement can help you plan for bumps in the road ahead.
No Plan? Get off the Fence
Mary and Walter thought they had everything they needed for retirement. They knew there were many things that could arise that they hadn't anticipated, but they figured the best way to handle them was to take them as they came. Little did Mary and Walter know, not planning for financial shocks can take a major toll on finances.
Many people find that unexpected events, such as lack of finances or health scares, make the biggest impact on their nest egg.
What action should a retiree take? Prepare and protect yourself from financial shocks, like a stock market downturn, a health shock, the death of a spouse and the potential need for long-term health care. These unpredicted events can completely drain your nest egg. To help our residents avoid this scenario, we offer Life Care, the cost management plan for long-term care and estate protection.
When you include Independent Living at Arbor Oaks in your retirement planning, you have the assurance that Crestview will always be there for you, because we provide care for seniors at every stage of aging. We reduce the time and effort needed to transition between health care services, making sure our residents are getting the highest quality of care. Are you interested in learning more about Life Care and protecting your retirement? Contact us today!