You don’t want to be broke when you retire. Even with all the preparation, you could realize your retirement will cost you more than planned. In the first place, you must be aware of the causes that the budget that you’ve set in your mind may be less than what it should be. For example, if you’re concerned about whether you have enough cash, look at the signs that you’re not saving enough for retirement.
1. You don’t have a long-term Care Plan.
It is possible to be in debt by retirement if your needs were for long-term health care but didn’t have a plan to cover it. Over half of those reaching 65 the present will require long-term care, and one out of 7 will require treatment for longer than five years, as per the Department of Health and Human Services.
If you are receiving care at a facility for assisted living or nursing residence, expect to pay for it with a large sum of money. The cost for the care provided in the assisted living facilities was $48,612 in the year 2019, according to Genworth’s Genworth Cost of Care Survey. The price for an individual room in a nursing home is more than 102,000 dollars.
“Even the wealthiest individuals are in danger if they have a large amount of long-term health care costs,” said Dave Littell, Professor emeritus of taxation taxes at The American College.
What to Do?
There are a variety of strategies to help you prepare financially with regards to long-term health care, Littell said. For example, you can opt for a long-term-care insurance policy or a hybrid insurance policy that pays out in the event of an incident that is long-term in nature. Another alternative is to buy longevity annuities, Littell explained.
This insurance plan requires a lump sum investment and can give you a steady flow in retirement earnings. However, you must wait for a few years or until you reach a certain age before you can start receiving your money. So, in the end, “you aren’t able to precisely date it when you need long-term care,” Littell said. He added that you should consult with a financial planner specializing in long-term-care planning to help you develop an approach.