Retirement planning is not something that most people look forward to. It’s often seen as a necessary evil – something that you have to do but don’t really want to think about. However, the sooner you start planning for retirement, the better off you’ll be.
The earlier you start saving, the more time your money has to grow. And the more you know about retirement, the better prepared you can be for it. In this blog post, we will explore five retirement facts that you need to know. From Social Security benefits to 401(k) plans and more, read on to learn more about what you need to do to plan for a comfortable retirement.
1. The Retirement Age Is Rising
The retirement age is rising for several reasons. First, people are living longer and healthier lives. This means that they can continue working later in life if they choose to do so. Second, the Social Security retirement age is slowly increasing. It is currently set at 67 for people born in 1960 or later.
Finally, many companies are now offering “phased retirement” programs which allow employees to gradually transition into retirement over a period of several years.
This trend of delaying retirement is likely to continue in the future as people live longer and healthier lives. If you are planning for retirement, it is important to keep these trends in mind and factor them into your plans.
2. More People Are Working Into Retirement
A recent survey found that more people are working into retirement than ever before. In fact, nearly one in four Americans over the age of 65 are still working. There are a number of reasons for this trend.
Some people simply enjoy working and don’t want to retire. Others may need the income to supplement their retirement savings. And still, others may want to stay active and engaged in their later years.
Whatever the reason, it’s clear that more and more Americans are choosing to work well into their retirement years. And that’s a trend that is likely to continue in the years ahead.
3. Retirement Savings Are Insufficient
There are a number of factors that contribute to insufficient retirement savings, but one of the most significant is the rising cost of living. As prices for goods and services continue to increase, retirees are finding it more and more difficult to make ends meet on a fixed income.
Additionally, many workers are putting off retirement because they simply can’t afford it.
The average Social Security benefit only replaces about 40% of a worker’s pre-retirement earnings, which leaves most retirees relying heavily on their savings to cover basic living expenses.
However, according to the Employee Benefit Research Institute, the median retirement account balance for workers aged 55-64 is just $118,000. For those nearing retirement with no pension or other source of guaranteed income, this simply isn’t enough.
Of course, there are steps that workers can take to boost their retirement savings, such as contributing to a 401(k) or IRA. But for many Americans, it may already be too late to catch up.
The bottom line is that if you’re not saving enough for retirement, you’re not alone – but you need to start taking action now to ensure a secure future.
4. Social Security Benefits Will Not Be Enough To Cover Expenses
For many Americans, social security benefits will not be enough to cover all of their retirement expenses. This is especially true if you have a lengthy retirement or if you experience an unexpected health event that requires long-term care.
To make sure you have enough money to cover your costs in retirement, it’s important to start saving as early as possible. If you haven’t already started saving for retirement, now is the time to do so. The sooner you start saving, the more time your money has to grow.
There are several ways to save for retirement, including 401(k)s, IRAs, and annuities. You can also consider working part-time during retirement or downsizing your home to free up additional cash.
No matter how you choose to save for retirement, the most important thing is to start today. By taking steps now to ensure you have enough money saved, you can enjoy a comfortable retirement later on down the road.
5. Healthcare Costs Are A Major Concern In Retirement
As you approach retirement, it’s important to have a clear understanding of the costs associated with healthcare. In retirement, you will likely be responsible for a greater share of your healthcare costs than you were during your working years.
According to a recent study, the average 65-year-old couple can expect to spend $260,000 on healthcare costs in retirement. This includes both insurance premiums and out-of-pocket expenses such as copayments, deductibles, and prescription drugs.
Of course, this is just an average, and your actual costs will vary depending on your health status and the type of coverage you have. However, it’s important to be prepared for the possibility that your healthcare costs could be significant in retirement.
There are a few ways to help offset the cost of healthcare in retirement. One is to enroll in Medicare when you become eligible at age 65. Medicare can help cover some of your medical expenses, but it doesn’t cover everything.
You may also want to consider purchasing a supplemental insurance policy to help cover any gaps in coverage. Finally, staying healthy and active can help reduce your overall healthcare costs in retirement.
Related: Bone Health After Thirty: Prevention of Osteoporosis!
Conclusion
In conclusion, here are 5 retirement facts that you need to know:
- You can’t rely on Social Security alone – you need to have other sources of income.
- You need to start saving early – the sooner you start, the better off you’ll be.
- You should try to max out your 401(k) contributions – this will give you a big leg up in retirement savings.
- Make sure you have a good health insurance plan – this will help keep your healthcare costs down in retirement.
- Don’t forget about long-term care insurance – this can help cover the costs of assisted living or nursing home care in retirement.