For Mark Roberts’ Use: You’ve spent years planning and saving for retirement, and you’re almost ready to take the leap. But wait! As you focused on saving faithfully and establishing a secure retirement income, it is possible that you overlooked some other important facts about retirement. After all, saving money is only one part of the puzzle.
Did you know…
Healthcare isn’t completely covered by Medicare. A lot of people believe that when they turn 65, Medicare will take over all of their medical expenses. Unfortunately, this isn’t true. You will still pay premiums, co-pays, deductibles, and the full price of anything not covered by Medicare. According to Fidelity’s Retiree Health Care Cost Estimate, the average 65-year-old retiring today will spend about $260,000 on healthcare throughout their retirement years. That figure doesn’t include the cost of long-term nursing care, either.
Retirement might bore you. Right now, you just want to regain ownership of your own time. But without some structure to your day, and some planned activities, you might find that you become bored with retirement. The happiest retirees say that having a regular schedule is a large part of their satisfaction.
It could last a lot longer than you think. Lifespans have increased dramatically. Today, the average 65-year-old man can expect to live to about age 84, and the average 65-year-old woman can count on living to about age 86. If you’re younger than 65, your life expectancy is probably even greater. One in four people will live past 90, and one in ten will live past 95! So if you retire at 65, you could be looking at a retirement that spans 20 or 30 years.
Income taxes could surprise you. It’s a good idea to establish several forms of retirement income, and one of those will be your Social Security benefits. But if you earn above a certain amount, your Social Security benefits will be taxed. You might also owe taxes on some retirement plan withdrawals. As you plan for retirement income, make sure to plan for taxes, too.
Some of these things might not have surprised you, while others have you scratching your head. Occasionally we find that clients need to take a closer look at a few areas of their retirement plans, and make some adjustments. If you’re wondering whether your retirement plan is in good shape, give us a call and we’ll be happy to discuss it with you.
*Source for statistics: Social Security Administration and Fidelity’s Retiree Health Care Cost Estimate.