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.
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.
The first thing to do is to unify your retirement accounts if you have more than one.
Otherwise, it becomes hard to figure out how:
Also, please make sure the payments don't significantly go up when you unify them.
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.
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 medical costs in retirement.
Whether you're just starting out in your career, nearing retirement, or already retired, it's critical to comprehend and get ready for developing medical expenses. Part of gaining financial clarity includes understanding that Health care can be the greatest cost an individual is faced with in retirement.
The amount of retirement income to set aside for medical costs is primarily determined by one's age and overall well-being.
"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." - Chris Schaefer, MV Financial, head of the retirement plan practice
"65 year 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." - Genwort, a long-term care insurer
Your total retirement spending plan is determined by two factors:
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.
Based on the recent study by the Society of Actuaries, about 44% of Americans are worried they will 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.
"You can spend a relatively small amount now and end up with a substantial amount of income down the road." - David John, a senior strategic policy advisor at AARP Public Policy Institute
5. Don't be a victim of scammers.
Fraudsters will look to take advantage and severely damage the finances of the elderly.
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.
Editor's note: This article was originally published Aug 12, 2021 and has been updated to improve reader experience.
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