Retirement checkup: Get your savings plan on the fast track to good health
Your golden years should be a time to shine. But, heading into retirement without the right financial plan can take the sparkle off a life of leisure.
You should not rely on Medicare to pay all your retirement medical expenses. You'll still have premiums, deductibles and copayments. And, costs such as long-term care, eyeglasses and dental visits aren't covered by traditional Medicare.
Take your plan's vital signs
After retirement, the amount you might have to pay for health care costs is startling. A report from the Employee Benefit Research Institute found that:
- Men retiring in 2009 at age 65 will need $68,000 to $173,000 in savings - just to have a 50 percent chance of paying their uncovered medical expenses.
- Women of the same age are expected to need $98,000 to $242,000.
Over the past 20 years, medical expenses have risen faster than inflation. And, costs are expected to go higher. Yet, one in four people ages 46 to 64 have no retirement savings, according to a 2011 AARP survey.
And, between 2009 and 2010, one-third of African Americans AARP surveyed stopped putting money into retirement accounts. More than one-quarter took funds out early. This means it will be even harder to meet health care costs in the future.
Give your plan a workout
It's never too late to start retirement planning. The earlier you start, the better.
Here are three things you can do now:
1. See where you stand. Find out what you expect your retirement income to be. Then, do the same with your expenses. You'll get a clearer picture of your financial health.
2. Look for ways to close the gap. Your retirement expenses might be higher than your income. If so, make a plan to boost your savings. There are lots of ways to do so. For example, you might:
- Increase the amount you put into your retirement plan at work.
- Put more money into your health savings account if you have one.
- Find ways to cut costs so you can save more.
- Work longer than you'd planned to.
3. Turn to an expert. A financial planner can help you make an investment plan. You'll learn how to prepare for your future. And, you'll learn how to make the most of your money.
These tips will help you keep up with your health care costs, and give you a brighter future.
The information provided herein is for informational purposes only and is not a substitute for your doctor's care. Please discuss with your doctor how the information provided is right for you.