Feel like you’re unprepared for retirement? Don’t worry. You’re not alone. A recent Gallup study found that more than 50 percent of Americans are worried that they won’t be able to fund their retirement. In fact, retirement is America’s top financial worry.1
The good news is it’s never too late to develop a plan and take back control of your strategy. Of course, before you can take action, you need to identify areas for improvement. Below are a few red flags that could indicate you’re not as ready as you should be. If any of these sound familiar and you’re approaching retirement, now may be the time to take action.
You haven’t projected your retirement income.
Income is at the core of any retirement plan. The key to any successful retirement is to generate enough income to cover expenses and emergency costs. You’ll likely receive income from Social Security, a pension, personal investments and possibly other sources.
Have your projected your retirement income? While you may not be able to accurately predict your exact income each year, you can probably develop a reasonable estimate. The Social Security Administration can provide an estimate of your benefits, and your employer should be able to give you an estimated pension payment amount. You can work with a financial professional to develop your investment strategy and estimate your income from retirement assets.
You don’t know how you’ll pay for health care.
Expecting Medicare to cover your medical costs in retirement? You may want to reconsider. Medicare covers many health care costs, but it doesn’t cover everything. In fact, Fidelity estimates that the average retired couple will spend $280,000 on out-of-pocket medical expenses.2
Fortunately, there are steps you can take to manage the impact of healthcare costs. You can fund a health savings account (HSA), or you can look at supplemental Medicare policies. You may even consider long-term care insurance. If you don’t develop a plan, though, health care expenses could take you by surprise.
You provide financial support to your grown children.
Many of today’s baby boomers and retirees are still providing support to their grown children. According to a recent study from Fidelity, 47 percent of millennials receive some form of financial assistance from their parents. More than 20 percent still live with their parents.3
If you’re providing financial assistance to your adult kids, you may want to consider options to change the situation. It’s natural to want to help your kids, especially if they’re facing difficulties. However, that financial assistance could hurt your ability to save for retirement. If you continue to support your children after you retire, you may have trouble supporting yourself.
Talk to your children about your financial goals and retirement needs, and help them develop a plan to become independent. If you provide a significant amount of assistance, you may need to implement a long-term plan in which they gradually become more independent over time.
You have a significant amount of debt.
Many Americans struggle with debt. It’s a common financial challenge. However, it’s especially problematic in retirement. Every dollar you use to service debt is a dollar you can’t use to pay for health care or fund your lifestyle. If you’re struggling with debt, work with your financial professional to develop a plan to pay down the balance before you retire.
Ready to eliminate the red flags in your retirement planning? Let’s talk about it. Contact us today at Financial Solutions Group. 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.
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