Just because you have reached retirement age does not mean that your financial planning has come to an end. In fact, you still have a long life in front of you and a family that needs your support. Here are five types of planning and strategies that you should be thinking about after you have retired.
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Examining Income Streams
The first step towards effective financial planning and implementing the right strategies is looking at your streams of income. Most seniors will benefit from a retirement plan and Social Security, but is that enough for your needs? You may find yourself short when it comes to paying for what you want based on the income streams you have earned. The good news is that there are ways to boost your income streams or create new ones which will further augment your way of living. However, you will need to know where you stand first before taking any action.
Medicare Part D
One of the most important expenditures that most seniors will make is on prescription drugs. While Medicare Part D alone may not be enough for some seniors, combining it with gap insurance can provide substantial coverage that protects your income. When you consider just how much is spent on healthcare, reducing the out-of-pocket costs of purchasing prescription drugs goes a long way towards protecting your finances.
You have probably heard that retirees can live comfortably on 80% of the income they made when they were working. While you are no longer commuting to work, if you still have large, outstanding debt to pay that percentage will not be enough. You will need to pay off your mortgage, credit card debt, and any other outstanding debt so you can get more out of the money you earn. There are advantages to owning your home outright which can pay off in the long run as well as today.
When you consider that most seniors live 20 to 30 years past the day they retired, it is vital that the nest egg stays healthy and growing. Too many seniors find themselves with their retirement savings gone because much of it was not invested in areas that sustain a robust interest rate growth. So, you can still spend a substantial portion of your money into sectors that are safe, but still, generate enough interest to keep you ahead of inflation.
Life insurance provides reliable financial protection once you have reached retirement age. Whether you choose a whole life policy that provides dividends and the opportunity to cash it out for a profit or you select a less expensive term policy that protects your family’s finances, getting life insurance for over 65 is a wise investment.
Of course, other factors play a strong role in your financial planning. It is important to limit unnecessary spending where you can and create new income streams to augment your retirement savings. By implementing the right financial planning and strategies, you can get the most out of your retirement savings and live the way you want.