The traditional model of retirement – working at the same career, even the same company, for decades and taking a gold watch at age 65 – has gone the way of the horse and buggy for many folks. It’s been replaced by a new retirement, which requires major adjustment but also presents new opportunities.
Although not everyone will need professional long-term care in their lifetimes, a significant portion will, and few people are thinking about it. According to Boston College’s Center for Retirement Research, 58 percent of women and 44 percent of men will need nursing home care sometime in their lives. The average duration of such care is estimated at 0.88 years for men and 1.37 years for women.
The average cost for a nursing home in 2012 was $81,030 per year, and the average cost for home health care was $21 per hour. But only 13 percent of people buy long-term care insurance.
Long-term care includes the necessities of daily living, such as eating, dressing, showering, and taking medications. Therefore it is not covered under most medical insurance policies or Medicare. However some health insurance policies cover minimal assistance, and Medicare Part A covers full or partial costs for up to 100 days in a skilled nursing facility following a hospital stay.
One reason cited for why many don’t buy long-term care insurance, is that Medicaid programs cover long-term care for indigent residents. Medicaid’s programs are operated by the states and require that most of a person’s financial assets first be exhausted.
The CRR estimates show that, although only 13 percent of people actually buy long-term care insurance, 19 percent of men and 31 percent would be willing to pay for it. Considering the relatively large percentage of people who will actually need long-term care, it’s prudent for everyone to consider how they would defray the costs should they need them. Some options are:
Regarding option #3, you also have to consider whether your relatives are able and willing to do this. Many grown children become personally and financially burdened by the cost and stress of taking care of elderly parents.
Option #4 seems to be favored by many people. But it’s wise to make plans for contingencies, even if they’re never needed.
Are you concerned that your retirement savings won’t last? You’re certainly not alone. A 2013 survey of people age 50-70 found that on average their savings were $250,000 short of what they’d need for the type of retirement they envisioned.
Fortunately, there are ways to s-t-r-e-t-c-h your savings so they have a better chance of always being there when you need them. Here are a few suggestions.
Paying off debt, such as your mortgage, can seem like it should be a top financial priority. After all, sending thousands of dollars to the lender each month can become burdensome and pointless. Best to be rid of that payment as soon as possible, right?
Not so fast, say many financial experts. While paying off your mortgage can be satisfying and should be a priority for some people, for others there are things that should be taken care of first. Here is a short list.
Although many people will see their taxes go down after they enter retirement, a lot of folks are surprised that many of their retirement income sources are subject to taxation. Taxes are something you definitely should take into account when figuring your retirement finances.Continue reading
“Retirement” and “student loans” are two terms you might not hear often in the same sentence. But in fact, student loans are growing rapidly among people in or approaching retirement age. Education loans held by people 50 and over have increased 30% since 2005, according to the Federal Reserve Bank of New York, and now constitute 17% of $1.2 trillion in outstanding student loan debt.Continue reading
Retiring early is a dream for many people in their fifties or early sixties. People want to retire early because they’d prefer to do something else than work at their jobs. Maybe they find their jobs boring, too stressful, or just unpleasant, or maybe there’s a hobby, volunteer position, or even another career they’d rather pursue instead.
Can early retirement be more than just a dream? Here are some things to consider before you make the jump.Continue reading
More than 70% of retirees have less than a million dollars in net worth. This will come as comforting news to many people who fear they are behind in their retirement savings. Furthermore, two-thirds have less than $100,000 in annual income, and four-fifths have Social Security retirement benefits, averaging $1,294 per month, as their main source of income.