How are you managing your retirement? Learn three tips for living comfortably and street-free in retirement.
Many people work hard to live comfortably and save for retirement. Unfortunately, Yahoo Finance reports that when people reach their 30s, the optimism that comes with approaching retirement early or saving enough money wanes as certain realities hit, such as existing debt or not having enough income.
In fact, 33% of Americans don’t have retirement savings plans, which shows that they’ll have to continue working after retirement age. Meanwhile, despite the majority having retirement plans in place, some don’t actually have enough to comfortably fund post-retirement life — and many Americans live longer than the average 78 years.
Although there is no single formula to help you live comfortably in your golden years, these three steps are a good place to start:
1. Keep your finances in check
Money is the biggest factor holding people back from retirement, as experts suggest saving $500,000 to $1 million to be comfortable later on in life. This takes years to build up, so setting aside a retirement fund as early as possible is an absolute must. You can leverage retirement plans, like 401(k) and IRA accounts, and start an investment portfolio that can build wealth gradually.
But preparation isn't just about how sizeable your retirement fund in. Financial planner David Walters emphasizes the importance of paying off your debts, ideally entirely, before you even consider hanging up your work boots. You don't want loans, such as a mortgage and credit card bills, to be eating away at your limited income streams when you're no longer working. This is why cash flow management is crucial for retirees. Understand how much money is coming in versus how much is going out. This will help you live within your means and make financially wise decisions, like downsizing if you need to.
2. Choose the best health insurance plans for your needs
You may be in great health right now, but we become more susceptible to illness and injury as we age. Invest in good health insurance to ensure that you don’t financially struggle in the event of an injury or illness. CNBC reports that healthcare costs for retirees have reached $285,000 as of 2019 — and this is assuming you retire healthy. To help you lower your out-of-pocket healthcare expenses, you should consider Medicare plans.
Medicare is the government healthcare program that’s available to everyone 65 years old and above. It has different parts that you can get depending on the healthcare coverage you’d like to have. For instance, Part A covers hospital stays, while Part B covers outpatient services like diagnostic tests. You can add Part D if you feel like you’ll need help affording drug prescriptions, too. You can also choose to take advantage of just Part C, or Medicare Advantage. KelseyCare Advantage, one Medicare Advantage option, shows that this plan offers everything in Parts A, B, and D, while also having additional perks that are not in the other plans. These include vision, dental, and fitness benefits. Essentially you can and should customize your Medicare benefits to assure that your health is well cared for as you age. Good coverage when it comes to health insurance provides a safety net no matter what happens to you.
3. Prioritize your overall health
Even with health insurance, it’s still best to stay as healthy as possible in all aspects of your life. For one, healthy eating can make a big difference as you age. My Plate recommends having a colorful diet full of fruits and vegetables, alongside whole grains and protein. If you have certain conditions that restrict what you can eat, ask a nutritionist to help you with your meal plan. Meanwhile, exercising has both physical and mental benefits — it strengthens your body while also putting you in a good mood. Low-impact exercises like stretching, strength training, and walking help reduce the risk of problems like fractures and joint pain.
It’s important to take care of your mental health as well. Stay connected with family and friends, physically or through social media, to combat loneliness and feelings of isolation that can cause depression. Picking up a new hobby is helpful for mental health too because it increases the brain’s neuroplasticity so you can maintain cognitive health. If you have questions or any concerns regarding your health, whether mental or physical, consult a doctor so you're sure you're on the right track.
There are lots of things that need to be taken into consideration as you age — from your finances to your overall health. Because of this, Sara Finkelstein suggests taking into consideration all the what ifs as early and as much as possible to have a stress-free retirement that you can enjoy to the fullest.