5 Financial Situations You Need to Be Prepared for after Retirement

One of the most important responsibilities that people have is planning financially for retirement. While people can spend decades saving and preparing for retirement, there are five financial situations in retirement that need to be factored in to any retirement preparation plan.

Medical Expenses

The first financial situation that can affect retired people are underestimated medical expenses. Retired individuals could spend hundreds of thousands of dollars during their retirement years on medications and unplanned medical procedures. As the cost of health insurance has continued to rise, and people are beginning to live a lot longer, this cost is likely to only increase considerably in the future.

Declining Home Value

A cost that affects a lot of retired individuals today is declining housing values. Many retirees have a long term plan that includes selling their home, downsizing, and living off the equity that they built over time. However, with housing prices declining all over the country, this may not longer be a reasonable plan. Retirees need to avoid relying on this equity for financial support as it could disappear at any time.

Lack of Social Security

Historically, Social Security payments were enough to provide most retirees with enough money to survive financially. Over the next few decades, the amount of retirees will continue to grow, and the amount of workers will not be available to support them all. This will lead to declining benefits.

Death of a Spouse

The fourth financial situation that you need to be prepared for is the death of your spouse. As emotionally straining as losing a spouse can be, it can also be financially challenging. The cost of a funeral can easily exceed $10,000 and those that lose their spouse could lose social security income as well as pension income, depending on the pension plan. Because of this, all people need to factor this in when preparing for retirement. In the case of a wrongful death due to medical malpractice or another issue, filing a lawsuit may be a good option. When hiring a wrongful death attorney in Sacramento residents will be guided through the legal process.

Support for Children

One of the most frequently underestimated expenses in retirement is the cost of still having to financially support children and grandchildren. Due to tougher job markets and rising costs of education, many grown children have to continue to live at home and accept financial support from their parents, even after the parents have moved on into retirement.

Creating the Perfect Personal Finance Strategy for Middle-Aged and Senior Citizens

Finance (Photo credit: Tax Credits)

With the recent financial meltdown debilitating the job sector and leaving an entire generation’s financial security compromised, it’s hard to imagine the troubles faced by middle-aged and senior citizens when the younger generation is in so much hot water. Transitioning to a life with no full-time job and, more importantly, no fixed income can be overwhelming if you’re not prepared for it. 

Whether your retirement plans involve moving back to your old house in Exton PA or settling down comfortably in Napa Valley, you must have excellent dominion over your finances to help you realize these dreams. If you’re pushing 50 or 60 years of age, then here are five key questions to ask yourself in order to choose the most effective strategy for keeping your financial boat sailing smoothly under all conditions.

What Assurance Does Your Health Insurance Give You?

Blindly rejoicing under the blanket of assumed safety of Medicare may not be the smartest idea. It is imperative to be well-versed with all the fine print mentioned in the insurance policy you sign up for and back it up with another policy that covers the loopholes of the former one. It will save you the rude shock of getting a colossal medical bill you’re not prepared to handle.

Are Your Financial Records In Order?

Keeping vigilant records of your expenses and savings is the first step to developing a successful financial plan that will help you enjoy a comfortable retirement. They make it easier to identify any possible deductions such as employment costs, mortgage payments, or commuting expenses that will lower your taxable income. Consult a reputable financial planner by showing them your financial records in order to get a better assessment of your financial status.

What Are Your Tax Liabilities?

Sometimes getting a raise may not be the best thing to happen if you don’t possess the financial savvy to manage it. In fact, graduating to a higher tax bracket may do your bankroll more harm than good. That’s why it’s quintessential to keep track of any revisions in IRS and Social Security policies and adjust your financial planning strategy accordingly.

Is Social Security Really The Ultimate Safety Net?

Contrary to popular perception, Social Security isn’t always a financial guardian angel for your retirement years. If you look at the rules and laws governing Social Security policy, you’ll find out that they’re uncomfortably dynamic in nature is because the age of retirement specified in the Social Security policy keeps changing. Thus, you should maximize your income while reducing your taxable Social Security income as much as possible.

How Bulletproof Is Your Investment Portfolio?

Most financial planners agree that middle-aged citizens should focus on maintaining a growth-oriented investment portfolio with a healthy mix of blue-chip stocks and bonds. As a citizen crossing the age of 50, it’s recommended that you stick to making only stable investments with a low risk factor to ensure guaranteed returns.

The Retirement Savings Crisis - Infographic

It's terrible how ill prepared most of us are for retirement. It's not like we don't know it's going to happen. We have more than half of our lives to get ready for it. Sadly, some of those that did prepare have had their savings taken out by the current economic problems. 

If the government really wanted to do something about this they should have a method to start the preparation for retirement when we are born. At birth we give children a Social Security card, why not a retirement account also. Why wait to start something important like that 25 years later? What's your take?

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