Is retirement in your near-term plans? If so, this may be a busy time for you. You could be busy taking your final planning steps and shoring up your savings. You also may be making plans for after you retire, such as vacations, new hobbies and trips to visit family. While this may be an exciting time, it’s also a good time to evaluate your retirement planning and identify any potential gaps or risks. A financial professional can help you with this process and recommend action steps to strengthen your financial foundation as you head into retirement. If you’re not working with a professional on your retirement strategy, now may be the time to do so. Below are three key questions to answer: How will I generate enough income to fund my lifestyle?
This is perhaps the most important question every retiree faces. Financial success in retirement depends on generating enough income to cover your planned expenses. You may have income from Social Security and even a pension, but it’s also likely that you will need distributions from your savings as well. Your financial professional can help you develop a retirement budget and project your income. You can then use that budget to identify gaps and take action. Perhaps you need to ramp up your savings, or maybe you need to scale back your estimated retirement spending. You may even consider using an annuity to create a guaranteed lifetime income stream. Your financial professional can help you decide on the most appropriate action items. How will health care costs impact my budget? Think Medicare will cover all your health care costs? Think again. While Medicare is a valuable resource, it doesn’t cover all treatments and services. It covers only a portion of most costs, and some treatments and services aren’t covered at all. That means you could face out-of-pocket costs for things like deductibles, copays, premiums and more. In fact, Fidelity estimates that the average retired couple will spend $275,000 on health care expenses.1 A financial professional can help you develop a plan to minimize the impact of health care costs on your retirement. Your plan may include the use of a health savings account or a supplemental health care policy. You might also consider long-term care insurance, as Medicare usually doesn’t cover long-term care. Should I wait to file for Social Security? When should you file for Social Security benefits? It’s a question every retiree faces, and the decision is permanent, so it’s important that you consider the issue carefully. Once you file, you can’t make a change to your selection. Your age at the time of your filing plays a big role in determining your benefit amount. You can file as early as age 62, but you’ll see a reduction in your benefit if you file before your full retirement age (FRA). Most people reach their FRA between their 66th and 67th birthdays. You don’t have to file at your FRA, though. If you choose to delay your filing, you’ll see an increase in your benefit amount. Social Security offers an 8 percent annual benefit credit for every year you wait past your FRA. If your FRA is 66 and you wait until age 70, you’ll receive four years of 8 percent credits, for a total increase of 32 percent.2 Delaying your filing will lead to a higher benefit amount, but that doesn’t mean waiting is the right answer for you. Your decision should be based on your specific needs and objectives. Perhaps you can’t wait to retire and have no other source of income. Or perhaps you have multiple sources of income and can afford to wait with some shrewd planning and budgeting. Again, a financial professional can help you make an informed decision. Ready to develop your retirement strategy? Let’s talk about it. Contact us today at Financial Solutions Group. We can help you analyze your needs and create a plan. Let’s connect soon and start the conversation. 1https://www.fidelity.com/viewpoints/retirement/retiree-health-costs-rise 2https://www.ssa.gov/planners/retire/1943-delay.html 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. 17379 - 2018/2/13
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