Published on June 1st, 2022
As of 2019, there were 703 million people in the world over the age of 65. The United States alone had a retiree population of about 16.5 percent. According to Statista, this number is expected to increase to 22 percent by 2050.
If you’re a millennial reading this, it’s never too early to talk about retirement. It’s a demanding process that requires significant planning. Here are a few important things to consider when planning retirement.
Where to live when you come off work is one of the first things to consider during your retirement planning.
It’s likely you may not have a strong affinity for your home when you retire. Why? Your kids might move to a new town or foreign country.
More so, you won’t have to live close to your work anymore for commuting purposes (if that was your reason for choosing your current home location).
For this reason, many seniors gravitate toward moving into new areas. While you’re free to do so, where you go can significantly impact your savings and lifestyle.
For instance, there’s no point in buying a new home in a bustling community if you’ll be away touring for most of the year. You can also consider registering at senior living communities if your health at retirement age requires you to have caregivers and geriatricians on speed dial.
Many people aged 65 and older are susceptible to numerous health issues ranging from back pains to severe organ failure. Without health insurance, retirees could struggle with numerous out-of-pocket medical bills.
You can complement your private health insurance, and Medicare with a health savings account to prepare you for spikes in your medical bills during retirement. Withdrawals for medical expenses are tax-free, but deductions may apply to your contributions.
Estate planning is another sector that many retirees undermine or often consider too late. Factoring estate planning into your retirement plan can help distribute your wealth and assets.
Estate planning objectives vary depending on various factors. For instance, early investors may focus on wills and powers of attorneys, but a trust fund becomes crucial to your financial plan if you have a family with children. For this reason, enlist a qualified estate planning attorney.
Investments require different methods and strategies at different stages in life. Risky financial investments might be attractive to the young working class, but not to seniors and retirees seeking stability during their last days. Therefore, it’s crucial to measure concerns and return on investment (ROI) objectives side by side as you build your portfolio.
According to a Harvard Business Review study, about a third of older people who retired early have gone back to work, operating part-time and other flexible working terms.
For many retirees, this decision is to keep active and prevent them from idling away while on retirement. This decision can significantly impact your retirement planning efforts and financial flow.
All in all, new retirement planning trends indicate that there is no formula or template. You can follow these tips to build a retirement plan that serves you well and takes your portfolio, taxes, and lifestyle into consideration.