Is retirement approaching quickly? Before you know it, your working life will be over and you’ll be enjoying your golden years. You’ve probably been thinking about what retirement will be like and how you will fund your expenses. Planning ahead can take much of the uncertainty and anxiety out of retirement.
Unfortunately, you can’t plan for everything. Emergencies happen, and they often bring great expense. You may also find that once you’re retired, you find new interests and hobbies. They could be things that you hadn’t anticipated while you were working.
You can’t predict every aspect of retirement, but you can prepare for the unexpected. Below are a few common things that take retirees by surprise after they leave the working world. Consider these ideas and be sure to incorporate them into your retirement planning.
Emergencies and unexpected events happen to everyone. If you haven’t planned for some emergency spending, you might be putting your savings at risk. Things like home repairs, medical bills and long-term care are expensive and have the potential to eat into your retirement resources.
An average retired couple can expect to spend $260,000 on out-of-pocket medical expenses during their retirement.1 While Medicare is a good program and can help cover medical costs, it won’t cover everything. One of those costs is long-term care. And because the average 65-year-old has a 70 percent chance of needing long-term care at some point, it might be a good idea to have a plan in place so you can pay for it.2 Fidelity estimates that a 65-year-old couple would need $130,000, in addition to out-of-pocket medical expenses, to insure against long-term care expenses.
Building up a reserve of funds that can cover the expenses associated with medical costs and long-term care might be one strategy you could consider. Another option would be to purchase long-term care insurance. There are many types of long-term care insurance available, and a financial adviser can help you choose which one is best for you.
People often think they’ll spend less money after they retire. This is not always the case. Having more free time and more money than you’re used to is a dangerous combination. If you’re not careful, you could find yourself spending your savings faster than you should.
After they retire, people can tend to fill their newfound free time with traveling, shopping, dining out or pursuing expensive hobbies. While there’s nothing wrong with those things, you may want to think about what activities are most important to you. It might also be a good idea to create a budget so you can see how much you have to spend. You can also be creative and find ways to have fun without spending lots of money.
Most people are excited about not having to work anymore. But some people can find that retirement doesn’t quite suit their personalities, and they yearn for a challenge to pursue. Is having free time something you’ll like, or will you get bored and restless? It’s a question you might want to ask yourself.
And if you think you’ll get bored, you may want to think about transitioning into retirement on a phased schedule. You could also consider taking on a part-time position or helping a charity.
Need help developing a budget and retirement spending plan? Let’s talk about it. Contact us at Gallagher Financial Group. We can help you evaluate your objectives and needs, and then develop a strategy. Let’s connect soon and start the conversation.
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.
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