#In the course of your retirement planning, you may make certain assumptions — that you’ll be able to work until a certain age or that your investments will grow in a certain manner, for example. #But there are a few assumptions you really can’t bank on. #Buying into the following beliefs could leave you cash-strapped during your senior years.
3 RETIREMENT MILESTONES YOU SHOULD REACH BY AGE 50
1. #Assuming you’ll spend much less on living expenses
#Many people figure that living will cost a lot less in retirement. #But why? #Aside from not having to pay to commute or fund a retirement account, the bulk of your pre-retirement expenses are likely to stay the same. #Some, in fact, may go up, like healthcare and entertainment (not having a job means potentially spending more to occupy your time). #Outline your expenses so you know how much monthly income you’ll need to stay afloat. #That’ll help you assess how you’re doing savings-wise.
HALF OF AMERICANS WITH INCOMES OVER $100,000 FEAR THEY’LL NEVER RETIRE
2. #Assuming #Medicare is free
#Medicare provides health coverage for millions of seniors, but it’s far from free. #In fact, the only aspect of #Medicare that’s free (most of the time) is #Part A, which covers hospital care. #Parts B and D, which cover outpatient care and prescriptions, respectively, both charge a monthly premium.
There are other #Medicare expenses to contend with, including:
- #Hospital stay deductibles for #Part A ($1,484 per stay in 2021)
- #Annual deductibles for #Part B ($203 in 2021)
- #Daily coinsurance for hospital stays beyond 60 days
- #Coinsurance for services rendered under #Part B
- #Prescription drug copays
- #Medigap (supplemental insurance) premiums
- #Fees for services #Medicare doesn’t cover, like dental care or eyeglasses
#If you don’t budget for #Medicare ahead of time, you may be in a serious financial crunch once retirement rolls around. #Read up on the various costs you might face and figure out if you’ll have enough income to cover them. #Medicare costs tend to increase from year to year, but you can use next year’s numbers as a baseline.
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3. #Assuming you won’t need long-term care
#Though #Medicare will cover a stay at a skilled nursing facility following an injury, it won’t cover nursing home stays, nor will it cover assisted living, home health aides, or any other care that isn’t strictly medical in nature. #Medicare generally considers long-term care to be custodial in nature. #That means seniors are usually on the hook for paying it themselves. #Long-term care costs $172,000 on average, so that sort of outlay could be downright catastrophic to your finances.
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The typical #American turning 65 today has roughly a 70% chance of needing long-term care, according to the U.S. #Department of #Health and #Human #Services. #Don’t assume you won’t fall into that category. #Instead, figure out how you’ll pay for long-term care. #Securing long-term care insurance at some point during your 50s or early 60s might help.
#Don’t fall victim to inaccurate assumptions. #Instead, assume your spending will only decline modestly, know your #Medicare costs, and prepare for long-term care. #Taking these steps will help ensure financial comfort during your later years.
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#retirement #assumptions #leave #broke