Except in some rare cases, we all need to have a plan for our retirement years. Each person has individual financial goals along with their personal savings situation. Hopefully, you have a personal financial advisor to help manage the savings you have accumulated. However, your healthcare is a “wildcard” during your retirement years, and you need to plan for it. Planning for retirement is one of the smartest things you can do, not only for you but your loved ones, too. Here are five helpful tips to keep your retirement plans on track.
Let’s look at the upcoming important dates for Medicare Open Enrollment:
The next open enrollment period will run from October 15, 2020 to December 7, 2020, for coverage effective in 2021.
Do Not Underestimate Your Costs of Healthcare
Most people think they can cover their health expenses during retirement. 64 percent of people believe they will have enough money to cover their medical expenses during retirement. This could be a case of not looking at facts. Estimates show that an average couple needs $270,000 for retirement to cover their healthcare cost. This figure is just an average, so you may need more money in retirement to cover your healthcare cost. No matter what your situation is, you may need more money in retirement than you have available to you now.
Pre-Retirement Income Helps Determine How Much Medicare Will Cost
In fact, your pre-retirement income is a big factor in determining the cost of Medicare. The longer you remain in the workforce and contribute to Social Security, the more you can expect to receive during retirement. There are admittedly many other factors that contribute to how long one can remain in the workforce, including catastrophic illnesses and/or divorce and or death.
Do Not Overestimate Your Medicare Coverage
Keep in mind that Medicare, while very valuable, was not designed to cover all of a retirees health care expenses. There are four principal parts to Medicare coverage: Part A, Part B, Part C, and Part D. However, do not let the fact that there are four available parts to your healthcare coverage fool you into thinking everything is covered. These gaps in Medicare coverage can be covered with Medicare advantage or perhaps a Medigap plan. Medigap policies can help with some healthcare costs Medicare does not cover. An example of this would be a Medigap policy that covers deductibles and copayments.
Retirement Age is an Important Factor
Although not always possible, one needs to have a plan regarding at what age they will retire. Whether you retire before the age of 65 or after the age of 65 can make a difference in how much Social Security money one receives. Because this can be important day to day living or just as a supplement for other saved money, it is important to know what you will receive. When to retire also can be determined by factors such as health, desire to work longer, health or spouse’s health, offspring’s financial situation, or related matters.
Retirement: Current and Future
As of 2019, the odds of most American’s having security in their retirement has not improved. Retirement in America reflects distinct realities depending on affluence. The cost of Medicare keeps going up while the value of Social Security benefits continues to decline. However, a successful retirement for the affluent has improved. The lowest income households do not have as good of retirement prospects. In fact, baby boomers who are approaching retirement have seen their odds of a successful retirement fall from 26 percent, down to 11 percent.
Investment Advisory Services offered through Retirement Wealth Advisors (RWA), a Registered Investment Advisor. Pennsylvania Wealth Management and RWA are not affiliated. Investing involves risk, including the potential loss of principal. No investment strategy can guarantee a profit or protect against loss in periods of declining values. Opinions expressed are subject to change without notice and are not intended as investment advice or to predict future performance. Past performance does not guarantee future results. Consult your financial professional before making any investment decision.
This information is designed to provide general information on the subjects covered, it is not, however, intended to provide specific legal or tax advice and cannot be used to avoid tax penalties or to promote, market, or recommend any tax plan or arrangement. Please note that Pennsylvania Wealth Management and its affiliates do not give legal or tax advice. You are encouraged to consult your tax advisor or attorney.
Annuity guarantees rely on the financial strength and claims-paying ability of the issuing insurer. Any comments regarding safe and secure investments and guaranteed income streams refer only to fixed insurance products. They do not refer, in any way, to securities or investment advisory products. Fixed insurance and annuity product guarantees are subject to the claims‐paying ability of the issuing company and are not offered by Retirement Wealth Advisors.
Million Dollar Round Table (“MDRT”) is a membership organization. Qualifying criteria for membership includes attaining specified levels of commissions earned, premiums paid or income earned on the sale of insurance and other financial products. MDRT membership requirements include the payment of annual dues, compliance with ethical standards, and maintaining good standing with an MDRT-approved professional association. The MDRT logo and/or trademarks are property of their respective owners and no endorsement of Jason Bergey or Pennsylvania Wealth Management is stated or implied. MDRT and Retirement Wealth Advisors, Inc. (RWA) are not affiliated.