It inevitably happens to all of us. As we grow older, our bodies simply don’t…
You’ve saved diligently for retirement. You’ve selected the right mix of stocks, bonds, and savings accounts to provide a comfortable income in your golden years. You’ve set up an emergency fund for unexpected bills. But have you accounted for these contingencies? Here are some often-overlooked situations that could derail your carefully laid plans.
1. Disability. An injury, illness, or just the aging process can leave us unable to perform the basic tasks of living. About 70 percent of people age 65 or over will need long-term care or assisted living sometime in their lives. But assisted living is expensive: in 2014 the national median rate for a one-bedroom assisted living facility was $42,000 per year. That’s where long-term care insurance may come in. Other possible options are annuities and reverse mortgages. Some life insurance policies allow the policyholder to withdraw cash from the policy balance for assisted living.
2. Caring for parents. There are 43.5 million adult family caregivers who are caring for a parent or other person age 50 or over. Over 20 percent of Americans are caring for an elderly parent or have done so in the past. Most are not prepared for the financial cost. Nearly half of caregivers spend over $5,000 per year, and nearly one-third spend over $10,000 per year. Caring for aging parents may also require cutting back on working hours or even foregoing a career altogether.
One woman describes her experience in this video
3. Boomerang kids. Close to 14 million adult children are living with their parents, and millions more are receiving financial assistance from their parents. In addition to living expenses, parents are paying their kids’ loans, cell phones, and other costs. Many parents are dipping into their own retirement savings to help their adult children. This video gives some statistics and some suggestions for parents.
4. Loss of spouse. If you’re planning to help support yourself and your spouse by working part-time during retirement, your untimely demise could leave your spouse unable to meet living expenses and financial obligations. A term life insurance policy can help make this up so that your spouse would not have to liquidate retirement savings that will be needed later.
5. Financial scams. Retirees are prime targets for financial scams, because they often have savings, are concerned about outliving their assets, and are often trusting. Investment, medical, and insurance frauds are often perpetrated against seniors. The best ways to protect yourself against fraud are to be wary of and thoroughly investigate any offers; do not respond to requests for personal or financial information over the phone or Internet; and take your time and do not fall for high-pressure sales tactics.
This video describes some common scams against seniors.