A Retiree's Safe Path to Financial Clarity

By Susan


Last Updated: August 12, 2021


A retiree as defined by Merriam-Webster dictionary is a person who has retired from a working or professional career. Now, what is financial clarity? According to the Oxford dictionary, clarity is the quality of being certain or definite. So, financial clarity can simply be said to be the quality of being certain financially, in short; financial certainty. 

  • Financial clarity is drinking coffee in the morning, going through the newspaper headlines, and knowing what you are reading has little or no impact on your ability to meet your financial objectives. 
  • Financial clarity is spending time with your kids and grand kids without worries about how bills will be paid. Financial clarity is being sure your family will be taken care of if something unanticipated happens. There's a lot more to financial clarity than just investment returns.

This write-up will highlight a few points that can guide retired people to having certainty with their finances and achieving their financial objectives in retirement.


1. Make your finances easier to manage.

The first thing to do is to unify your retirement accounts if you have more than one. Else, it becomes hard to figure out how your resources are distributed, how much you have in stocks, shares, and cash, or to know whether your assets overlap. Also, please make sure the payments don't significantly go up when you unify them.


2. Don't entirely leave the workforce

Regardless of whether you quit the 9-to-5 jobs, don't altogether leave the labor force. Some associations like to have older employees due to their soundness and beneficial experience. Discover something that you enjoy doing and don't see as much of a task like part-time work at a golf field or a nearby theater; they probably won't pay so much but will decrease the amount you dig into your savings and pension. Retirees, especially in the early periods that are still medically fit should consider working part-time or full time while retired. 


3. Pay attention to your Health Care expenses

Regardless of saving and getting ready for retirement their whole working lives, many retired people aren't intellectually or monetarily ready for the significant expense of clinical costs in retirement. Either you're just starting out in your career, nearing retirement, or already retired, it's critical to comprehend and get ready for developing clinical expenses since Health care can probably be the greatest cost an individual is faced with in retirement. The amount of retirement income to set aside for clinical costs is primarily determined by one's age and overall well-being.

  • MV Financial, head of the retirement plan practice, Chris Schaefer, said, "The healthier we are going into retirement typically means that less money will be allocated toward health care expenses," "The other side of that coin is that with a healthier lifestyle, life expectancy will be longer and, therefore, retirees need to plan for a longer time in retirement."
  • Genwort, a long-term care insurer, also said, "65 years old couple who retired in 2020 can expect to spend $295 thousand USD in health care and medical expenses throughout retirement. This excludes the additional annual cost of long-term care, which in 2020 had an average cost around $105 thousand USD for a private room in a nursing home."

Your total retirement spending plan is determined by two factors: the amount of money coming in each month and the total cost of your expenditures. It's important to understand that Social Security is only intended to complement retirement savings. Considering options other than retirement savings to pay for Health Care, there are two options for pre-retirees to build a healthcare support system for their retirement years.

  • Health Savings Account (HSA)
  • Long-Term Care Insurance


4. Don't undervalue your life expectancy.

Based on the recent study by the Society of Actuaries, at least half of Americans do not have enough money set aside for their golden years. Purchasing a deferred-income annuity is one way to be safe. You pay a certain sum to an insurance broker, and some years later, you begin earning a lifetime revenue.

  • David John, a senior strategic policy advisor at AARP Public Policy Institute, said, "You can spend a relatively small amount now and end up with a substantial amount of income down the road."


5. Don't be a victim of a Scammer.

Fraudsters will look to take advantage and severely damage the finances of the elderly. 

  • Barry Korb, a professional and member of the Financial Planning Association at Lighthouse Financial Planning in Potomac, Md., said "You don't have the years to recoup," while giving credit reports for suspicious activity.

Keep an eye on your credit reports for any unusual behavior. Request a security freeze on your credit report from the credit reporting agencies. This will prevent a thief from opening credit lines in your name. Sign up for watchdog warnings via AARP's Fraud Watch Network.




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