We’re all at different stages with our retirement planning. Some have a plan written out that they refer to, and others adhere to guidelines they’ve stored away mentally. Some may have talked to a financial adviser to get help on reaching their future goals.
Because of changes and improvements, along with the current economic climate, it might be time to give your plan another look. Here’s a list of three things you should take another look at:
Health: Yours, And What It Costs
In 1935, the Social Security Administration set 65 as the age for retirement♦. Average life expectancy in 1935 was 61.7∝. Improvements in medicine and how we care for ourselves have changed our view of the age 65. Today, an average American lives to over 85 years of age∇.
- For some, 65 comes “too early.” They feel like they are still fully capable of earning income, still enjoy working, and are not ready to retirement. Others may be dealing with financial duress – instabilities like fluctuations in home prices, job loss have delayed their ability to adhere to a plan. One study showed that about 1/3 of those over 50 plan on delaying retirement∞.
- Living longer extends the number of years Americans are actually living in retirement, and it’s not unusual for today’s retirement planning to consider decades of maintaining a lifestyle instead of over a handful of years.
- Everything has a cost, and our longer lives are often accompanied by additional health care costs. A healthy, 65-year old couple can expect to pay $266,600 in health care costs in retirement◊.
Paying Off The Mortgage
Paying off the mortgage has traditionally been a goal for many as they head into retirement. Some see it as a sort of financial “finish line”; and some see a fiscal value to retiring mortgage debt and the monthly payment.
Today, keeping the mortgage may make financial sense when considering taxes, current lower interest rates, and markets.
Social Security
While experts question if Social Security can stay solvent¹, the Social Security Administration has been advising those planning on retirement to expect Social Security benefits to replace 40% of working wages².
A recent AARP survey shows that over half of pre-retirees plan on Social Security benefits providing anywhere from 41% to even 100% of their retirement income³.
If you’re expecting to rely on Social Security for part or all of your retirement income, it’s time to re-evaluate your plan versus the realities that loom with the plan.
Get The Help You Need
Planning for retirement doesn’t have to be filled with anxiety in face of change. Relying on a true fiduciary, a financial advisor who acts in its clients best interests all the time, can be a great first step towards easing stress and building trust.
♦https://www.ssa.gov/history/briefhistory3.html
∝https://www.ssa.gov/history/lifeexpect.html
∇https://www.ssa.gov/planners/lifeexpectancy.html
∞https://www.fbfs.com/learning-center/6-ways-retirement-has-changed-in-the-past-7-years
◊http://money.cnn.com/2015/12/30/retirement/retirement-health-care-costs/
¹http://www.pewresearch.org/fact-tank/2015/08/18/5-facts-about-social-security/
²https://www.ssa.gov/pubs/EN-05-10024.pdf
³http://www.aarp.org/content/dam/aarp/research/surveys_statistics/econ/2015/fpa-soc-sec-and-beyond-res-econ-secured.pdf
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