Below are four expenses that can hurt your retirement and the best ways to plan for them.
Long Term Care
According to one study, 70 percent of adults who survive to age 65 need long term care at some point. Average costs for a semi-private room are around $6,800 a month and Medicare won’t cover this. If you’re paying thousands of dollars a month for this type of care, you can run through your retirement savings very quickly.
To prevent this from sabotaging your retirement goals, you may want to consider buying long term care insurance. Premiums are cheaper when you’re younger, so it’s best to shop for this insurance before retirement.
Caring for Family Members
Some people end up caring for their grandchildren, taking in their adult children or caring for elderly parents or spouses. The physical and financial demands of caregiving can compromise a healthy savings plan. According to the AARP, typical family caregivers spend thousands of dollars of their own money each year to help their loved ones.
While you can’t predict all health problems that may arise, you can start having conversations early on. For example, if your parents’ health is declining, you can talk to them about their options. These conversations aren’t the most pleasant to have, but planning early can protect your future livelihood.
Paying off the family home feels great, but you’re not in the clear when it comes to the costs of homeownership. You’re still responsible for your property taxes, which can be $1,000 or more a month in some states, as well as household maintenance. The Bureau of Labor Statistics reports that the average senior spends $2,300 a year on home repairs and maintenance.
Retirement financial services in New Jersey can help by building flexibility into your retirement plan. This way, you can pay for that new roof or siding without having to dip into your retirement savings. Also, you’ll need to plan for homeowners insurance as well.
Many retirees assume they don’t have to worry about transportation because they’re no longer commuting back and forth to work. But you’ll still need a car to run errands and stay socially active. The costs of owning and maintaining a car can quickly add up, especially if you own the car instead of leasing it.
In your retirement plan, you should account for gas, car repairs, maintenance and auto insurance. And, if you end up needing a car that’s safer, newer or more affordable, you’ll want wiggle room in your budget to do this.
Retirement is a wonderful time in life, but many seniors worry about living on a fixed income. By working with a financial planner in New Jersey, you can ensure a solid and robust retirement plan that allows you to live your best life. Contact Leonard Financial Solutions today and let’s chat!