When it comes to taking the next step in your life – the life of retirement, there are many things to consider, but don’t make these three planning mistakes.
Underestimating the cost of healthcare
Healthcare costs are continuing to rise dramatically. Employers are shifting more weight of the costs onto their employees and many companies are dropping retired workers from their health plans. Out of pocket costs for Medicare and prescription drugs have also increased the past several years. These health costs are growing and you need to have sufficient savings or income to pay for it. Plus, health costs of Long-Term care needs can be devastating in retirement.
Misjudging how long you and your spouse will live
As medical technology increases along with life expectancy, the chance exists that at least you or your spouse will live past the age of 90. (Annuity 2010 Mortality Table; Society of Actuaries) So it’s vital that you have enough money saved to be prepared to live longer.
Presuming you will work a long time
Forty percent of retirees had to leave the workforce earlier than planned because of disability and 30 percent because of layoffs or corporate restricting. (Employee Benefit Research Institute Confidence Survey of 2012) Even if you want to work as long as you can, it may not always be possible.
Many people plan to work part time when they retire to supplement their income. Don’t fall into that trap. You need to have an alternative plan in case you can’t work due to health problems.
At Kline’s Investment Services we can help lay the groundwork needed to see you through your retirement years. Please call us today to set up a free consultation to discuss your retirement needs. Also please ask about our proprietary NextPhase-Retirement Income Planning Process. Call at (330) 673-2988.
Securities America and its representatives do not provide tax or legal advice. Tax-law is subject to frequent change; therefore it is important to coordinate with your tax advisor for the latest IRS rulings and specific tax advice, prior to undertaking an investment plan. Any tax or legal information provided here is merely a summary of our understanding and interpretation of some of the current income tax regulations and is not exhaustive. Investors must consult their tax advisor or legal counsel for advice and information concerning their particular situation.
Diversification can be thought of as spreading your investment dollars into various asset classes to add balance to your portfolio. Although it doesn’t guarantee a profit, it may be able to reduce the volatility of your portfolio.