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Planning for retirement can be a tricky ordeal. Maybe you’ve been planning out your retirement for a while, or maybe this is something you’re just starting to think about now. Regardless, 75 million Baby Boomers currently stand on the edge of retirement, and most are going to have to look beyond the scope of care provided by government programs to sustain their standard of living. Social Security and Medicare will only cover a portion of the expenses you’re sure to face as you enter retirement. Right now a staggering 80 percent of people ages 30-54 don’t believe they will have enough saved for their retirement. Unless you’ve been saving for a considerable amount of time, you may find yourself in financial trouble once you approach your goal retirement age. You want to be sure that you and your spouse will be financially stable with health insurance to cover any unforeseen expenses regarding your health and wellness. The amount you need to save to remain comfortable well into retirement will vary from person to person, but there are some key points you may want to consider when determining these figures.

While you can begin to collect Social Security benefits at the age of 62, that doesn’t necessarily mean it’s a good idea for you to begin collecting at that age. The amount you can collect through Social Security is reduced by a fraction of a percent for each month before your full retirement age. While it sounds nice to begin collecting your benefits early, you take a severe penalty on the amount you will collect on a monthly basis. This is extremely important to consider, as the amount you receive when you first apply for Social Security will be the amount you collect for the rest of your life. While Social Security offers Medicare plans to retirees, affordable health insurance is also important to span the coverage gap for healthcare benefits and prescription drugs.

Current statistics show that roughly 75 percent of Americans believe they will continue to work through their retirement, and of those another 32 percent claim they plan to continue working out of financial necessity. It is difficult to determine for sure whether or not you will actually continue working after you retire from your full time job, and though 75 percent of those polled by Bankrate say they plan to work after retirement, only 15 percent of those retired today actually do so. Times are drastically changing, so it is important to be conservative with your budget when calculating post-retirement work into your savings, as the job market is forever changing and you could face circumstantial issues or health problems that will prevent you from working.

Paying off your debts before saving for retirement should be an absolute must for anyone approaching the age of 65. In 2013, the average U.S. household held $15,270 in credit card debt. This is partially due to there being extremely indebted households at the time, the average household generally holds just over $7000 in credit card debt. Credit cards generally hover around 14-15 percent annual rate, so it is always best to pay them off as quickly as possible, saving a small balance if you wish to continue to build credit. If you manage to keep your debt low, it’ll be a lot easier to stock money aside for retirement.

Financial planning is critical throughout your lifetime if you wish to enter your retirement comfortably. If you have a spouse, consider their finances as well when planning for your retirement together. You may want to take a look at how stable you and your spouse’s jobs will be throughout the years before you retire. While most people cannot guarantee job security, if you feel concerned over the longevity of your positions you may want to consider trying to save more. Be sure to purchase health insurance to supplement your Medicare policy. Purchasing a Medicare Part D plan with a supplemental health insurance policy will make sure all your prescription drugs and doctor visits will be covered, saving you from being buried under exorbitant medical bills.

Citation:

Beard, S. (2014, February 9). Planning for Retirement? Here Are 5 Crucial Points to Consider. Retrieved July 5^th, 2017 from http://www.cheatsheet.com/stocks/planning-for-retirement-here-are-5-crucial-points-to-consider.html/?a=viewall

Davis, H. (2011, April 21). 9 Things to Consider When Planning for Retirement. Retrieved July 5^th, 2017 from http://blog.quizzle.com/2011/04/9-things-to-consider-when-planning-for-retirement/