Worried that you’re behind when it comes to planning for retirement? You have company. According to a recent Gallup study, more than 50 percent of Americans are concerned that they won’t be able to fund their retirement. In fact, retirement is America’s No. 1 financial worry.1
The good news is it’s never too late to develop a strategy and take back control of your retirement planning. Below are a few red flags that may indicate you’re not as prepared as you should be. Do any of these sound familiar? If so, now may be the time to take action. A financial professional can also help you implement a retirement strategy.
You don’t know how much income to expect.
At its core, retirement planning is about creating enough income to fund your expenses and lifestyle. To meet your desired standard of living, you’ll have to generate enough income to cover your needs and also keep up with inflation. While you may be able to count on income from Social Security and even pensions, much of your income in retirement may come from your own personal savings and investments.
Have you created an estimate of your potential income? If not, it can be difficult to know whether you’re on track. You can obtain an estimate of your Social Security benefit amount from the Social Security Administration. If you have a pension, your employer should be able to provide a projected payment amount.
It may be more difficult to project income from your savings and investments. A financial professional can help you develop a savings and investment strategy and then estimate a reasonable withdrawal amount that you can take each year.
You don’t know how you’ll pay for health care.
Think Medicare will cover all your costs in retirement? Think again. Medicare is a valuable resource, but it doesn’t cover everything. In fact, you could face significant out-of-pocket expenses in retirement. Fidelity estimates that the average retired couple will spend $280,000 on out-of-pocket medical expenses.2
If you’re approaching retirement, now is the time to take steps to cover those costs. For example, you could fund a health savings account (HSA). You also may want to consider a supplemental Medicare policy to address gaps in traditional coverage. A long-term care policy may also be a wise decision, as Medicare usually doesn’t cover in-home assistance or stays in assisted living facilities. If you don’t have a plan, health care costs could blow a hole in your retirement budget.
You support your 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 It’s become common for adult children to continue to turn to their parents for help, even after they leave the house.
While the desire to help your child may be natural, it can also be dangerous for your retirement planning. Every dollar you use to support your child is a dollar that can’t go toward funding your retirement.
It may be helpful to have an honest conversation with your child about your retirement needs and goals. Explain your objectives and what it will take to reach them. Then develop a plan to help your child achieve financial independence.
Ready to eliminate the risks in your retirement planning? Let’s talk about it. Contact us today at J. Harris Financial. 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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