Don’t Forget About These Big Retirement Expenses

The rule of thumb says you’ll need about 80% of your pre-retirement income in retirement, but everyone is different. Many retirees want to upgrade their lifestyle in retirement or maintain their current lifestyle. In fact, a recent study shows that about one in three retirees actually spent more than they expected they would when they first retired, and one in 10 spent much more than they anticipated. To help avoid this outcome, don’t forget about these potentially big retirement expenses.

Healthcare & Long Term Care
The average 65-year-old couple retiring today will need an estimated $295,000 to cover their healthcare costs[1], and that doesn’t even include long-term care costs. An estimated 70% of today’s 65-year-olds will need long-term care at some point[2] and costs can be staggering: In 2020, the median yearly cost for an in-home health aide was $54,912, and the median yearly cost for a private room in a nursing home was $105,850.[3] Medicare and Medicaid will only cover costs in some circumstances, so retirees must have a plan for covering healthcare and long-term care costs. This can include a life insurance policy with long-term care benefits, an immediate annuity, or other financial planning strategies.

Taxes
Your tax situation can change significantly in retirement, but that doesn’t necessarily mean you’ll pay significantly less. You may lose the ability to claim dependents or a mortgage interest deduction but may still be receiving taxable income from your 401(k), IRA, or other tax-deferred retirement accounts. In fact, between Social Security benefits, retirement account distributions, investment gains, and property sales, there are reasons why your tax burden could actually increase in retirement. Also, consider that tax may be at historic lows right now, and our growing national debt and taxincreasing proposals from the Biden administration could change this. There are ways to help reduce your tax burden in retirement, such as a Roth conversion, real estate strategies, and integrating your tax and investing strategies.

Your Lifestyle 
How much of your pre-retirement income do you expect to need in retirement? Before you answer, consider if you plan to maintain your current lifestyle in retirement. Will you stay in your home? Did you know that the average retiree household pays an average of $17,472 per year on housing expenses?[4] Maybe you want to travel or try some new restaurants. Will you want to adopt new hobbies with all of your free time and do they cost money? Retirement income planning is important, especially if you’re worried about making your savings last for the rest of your life. We can help you protect your nest egg from market loss, potentially grow your wealth, and create guaranteed income for life.

We’re here to help you plan for all aspects of retirement: tax minimization, healthcare, and long term care cost planning, Social Security maximization, estate planning, and more. Beyond looking at the numbers, we look at your unique concerns and goals. Sign up for a complimentary financial review to start the conversation with us.

  1. https://www.fidelity.com/viewpoints/personal-finance/plan-for-rising-health-care-costs
  2. https://acl.gov/ltc/the-basics/how-much-care-will-you-need.html
  3. https://www.genworth.com/aging-and-you/finances/cost-of-care/cost-of-care-trends-andinsights.html
  4. https://www.visionretirement.com/articles/largestexpensesretirees#

The content presented is for informational purposes only and is not intended as offering financial, tax, or legal advice, and should not be considered a solicitation for the purchase or sale of any security. Some of the informational content presented was prepared and provided by Lone Beacon Media, LLC dba Lone Beacon, while other content presented may be from outside sources believed to be providing accurate information. Regardless of source no representations or warranties as to the completeness or accuracy of any information presented is implied. Lone Beacon Media, LLC is not affiliated with the Advisor, Advisor’s RIA, Broker-Dealer, or any state or SEC registered investment advisory firm. Before making any decisions you should consult a tax or legal professional to discuss your personal situation.

Securities offered through World Equity Group, Inc. (WEG), members FINRA and SIPC.

Investment advisory services offered through Bluepath Capital and Triumph Wealth Advisors. Nicholas Wealth, Bluepath Capital and Triumph Wealth Advisors are separate entities, and are not owned or controlled by WEG. This material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. This information has been derived from sources believed to be accurate. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

kgmack

Leave a Comment

You must be logged in to post a comment.

Ready to Take The Next Step?

For more information about any of the products and services listed here, schedule a meeting today or register to attend a seminar.

Or give us a call at (404) 890-5606

Call Now Button