“You thought you’d planned for everything, but these things might still sneak up on you in retirement.”
Everyone’s busy with families, careers, home-buying, and then one day, college for the kids. It shouldn’t be too surprising that retirement planning takes a back seat, says The Washington Post in a recent article, “It takes a lot of work to be ready to retire. Don’t forget these things.”
While there are some who don’t begin considering retirement until they reach their 50's, it’s never too early to get started on retirement planning. The earlier you start, the less likely you will be to face some unfortunate realities.
Retirement can be overwhelming. In addition to the emotional costs of giving up your career and acclimating to your new life status, there are all the logistical and financial elements that must be addressed. Let’s look at those things that some forget to plan, or didn’t even realize they needed to plan:
Medicare. You must enroll in Medicare at 65 . If you delay until 66, you’ll have to take the initiative at that time because it’s no longer automatic. If you’re late, there’s also a 10% penalty for every 12 months you snooze. If you wait 24 months, there’s a 20% permanent penalty because you forgot to re-enroll. Enrollment is three months before to three months after your 65th birthday. If you delay taking Social Security, you’ll also have to enroll in Medicare on your own.
Health-Care Costs. Studies show that health care will cost about $250,000 for a couple in retirement, or about $5,000 per year per person. People frequently underestimate health-care costs in retirement—they forget prescription drug and long-term care costs—which can use up a lot of money. The same is true of dental expenses, and Medicare doesn’t cover dental.
Major Purchases and Repairs. Some fail to account for major purchases, such as home repair and upkeep. Many retirees are caught short on the occasional large purchase, so examine your budget annually to be sure you consider things that come up quarterly or semiannually. Remember that life events like weddings, graduations, and spoiling the grandkids can be major unanticipated costs.
Planning for a Long Life. This is very important. If you were to live to age 90, would your money last? There are many things to take into consideration when you think about 25 years in retirement - long-term care being one of the most important considerations.
Estate Planning. Estate plans aren’t just for the wealthy, and if you’re not pro-active, all those decisions will be made for you by the state. Create a will or trust, be certain that your beneficiaries are correct and up to date, and make sure you have a power of attorney and health-care directive.
It is important to discuss these critical issues with your Elder Law and Estate Planning Attorney. Contact me, an attorney board certified by the Florida Bar in Elder Law and Wills, Trusts & Estate Law, for all of your retirement planning needs!
Reference: The Washington Post (October 15, 2016) “It takes a lot of work to be ready to retire. Don’t forget these things.”