Planning for your retirement is one of the things you will need to consider if you want to live a comfortable life after you retire. Just the thought of retirement can cause anxiety for many people. However, there are many people who make mistakes that can derail their retirement plan. Here are a couple of things you might want to consider.
Ask yourself the question, “Am I living too large?” To get a proper answer to that question, you will need to find out how much income you need to maintain your current lifestyle in retirement. And surprisingly not many people can answer that question. You will need to talk to your financial advisor to help you draw up a proper retirement plan that is sustainable. As a general rule of thumb, you will need around 80% of your current annual income in retirement. Retirees spend more on entertainment, eating out, and on travel, so you will need to take these into consideration when planning for retirement.
Higher Health Care Costs
People overlook higher health care costs during retirement. Health care costs are constantly on the rise and at retirement people will need to pay more for health care. Do not make the mistake of overlooking health care costs when planning for your retirement.
Long Term Care Plan
Caring for an aging parent can take its toll on the loved one’s savings. The time and money needed to provide long-term care for aging parents can be enormous. According to the US Department of Health, approximately 70% or people over the age of 65 will require care at a point in their lives. Talk to your financial advisor and make sure you include long term care plans for your retirement plan.
Leland Fondow is a financial advisor with several years’ experience in retirement planning.