As you approach retirement, there are a few things that may impact your retirement funds and your ability to retire well. There are a few things that you should consider as you move closer to wrapping up your career and enjoying your retirement years.
Healthcare Expenses
One of the biggest areas that can drain your retirement funds is healthcare expenses. As Ohioans age, the cost of healthcare typically increases and without proper planning, these expenses pose a risk to the longevity of your retirement funds. The first step with any healthcare planning is choosing a plan that covers your anticipated expenses. Medicare covers seniors in Ohio, but it doesn’t cover everything. Finding a good Medicare supplement is key to limiting your healthcare expenses.
Understanding Your Retirement Expenses
Planning for retirement involves considering various costs. While some expenses, such as daily commuting, may decrease, others like leisure activities or travel may increase. A good rule of thumb is to anticipate 70-80% of your pre-retirement expenses during retirement. Budgeting, a habit from your working years, remains as important in your retirement years to make your funds last. Another factor to address is debt. Carrying debt into retirement can be burdensome. When you were working, you could pick up extra work to pay down your balances, but in retirement, the only funds are from your nest egg. Plus, the monthly expenses of car loans, mortgages, or student loans can strain your monthly budget, which can impact your ability to enjoy your retirement.
Charting Your Retirement Income Streams
Knowing the expense side of the equation is crucial, and understanding your anticipated retirement income is just as important. While Social Security and pensions may provide a base, a substantial portion will likely come from your retirement savings. Planning your income ensures a steady flow to cover monthly expenses, reducing the worry of outliving your savings—a common concern for retirees.