Having reached the age of 67, it’s only now that the realities of retirement have actually sunk into my brain. After all, like most of us, that kind of event always seems like it’s far off in the distant future. It’s a lot like thinking about your long term health prospects in that you seem invincible in some respects and working every day fortifies that feeling.
Realistically, we all know that retirement is coming whether it is in a far distant future or just peaking over the horizon. But even knowing that, we sometimes don’t paint a realistic color to what it will actually be like. Will it be a time of exploration, fun, and peace of mind? Or will it be a time of struggle, difficulties, and a less comfortable lifestyle? The way your retirement unfolds is never 100% under your control but the ways you prepare for it are for sure. That’s why you need some solid retirement strategies.
Wishing for Success Won’t Make it Happen
It’s always a good time “right now” to examine your retirement strategy plan and even more so these days because some of the traditions of planning are changing. The 21st century presents new challenges and benefits that previous generations of retirees never faced. Time now to consider seriously what you are doing to prepare for it and more importantly what you can do to make your retirement years the very best they can be!
Even if you consider yourself to be a minimalist, that is a person who lives simply and doesn’t require a lot of “things”, having some comforts in your golden years will still require some kind of monetary support. Your days of extravagance may be truly behind you, but having food, clothing, and shelter is still on the must-have list even when you are in retirement. That’s probably why the overwhelming majority of financial advisors and bloggers are constantly talking about how much money you will need and what sources of income there are available to you once you retire. You didn’t find any of that a surprise, did you?
Knowing what you need in the lifestyle you want ahead of you starts years and years before retirement when you begin to save or invest in what will be the main source of your support after you stop working. In a real sense retirement, planning begins on the first day of your first job and continues until the day you actually retire. If it doesn’t happen that way, you haven’t maximized your retirement planning process.
Here’s to Your Health!
A good many people are really fortunate in not having any serious health problems most of their lives. It makes sense that younger people don’t have as many health problems. That explains why they seldom think about their health and have a view that they are more or less immortal when they’re young. If you have taken good care of yourself, have good genes, and do all of the routine precautionary things concerning your health, you may be one of those lucky people.
Unfortunately, you never know what will ultimately happen to you and your health. Those that do have health problems often have difficult periods of time in lives that interfere with family life, education, and work life, not to mention cause lots of stress. We all have friends or family members that have had such experiences, even if that doesn’t describe our own personal situation.
But, and it’s a biggie, even if you haven’t ever been sick a day in your life, you just never know when an illness or even an accident may completely change things. That’s why a good rule to live by is:
Plan for the best in life, but be prepared for the worst.
When it comes to your health, never take it for granted. Eat right, exercise enough, and see you doctor for regularly scheduled checkups. Don’t skimp on your health insurance and when necessary, take your doctor’s recommendations seriously. You have to carefully consider your health situation now and in your future because it can and will affect your life in multiple ways.
Health and Longevity
Another reason to think about health and retirement has to do with longevity. Because of advances in research and medicine people are living longer than ever before. Back in the 1960’s, 70’s, 80’s and 90’s people weren’t expected to live into their eighties as they are today. The longer lifespan is a blessing but it probably also means that at some point you are still going to experience health problems. Living longer means that you need even more funds in your retirement than ever before. Running out of money and outliving your funds is pretty scary.
Health insurance is a battleground as I write this and any changes in health care laws that are being debated right now will affect every one of us at some point in our lives. The bottom line is that you will need some kind of plan to cover all of the “what ifs” that are out there now and even more so as you grow older.
In retirement, your medical expenses can skyrocket overnight. In my own case, I discovered I had type 2 diabetes and congestive heart failure (CHF) among other conditions after I turned age 60. That was caused by a lifelong abuse of my body and some very poor lifestyle choices. It resulted in hospital stays and life threatening situations that now require me to see my doctors quarterly and to take over 10 prescriptions a day at very high costs. Do you think I ever planned that my health expenses would take such a huge chunk of my retirement funds to handle?
Most of us don’t think about that possibility unless you grew up with medical conditions during your childhood and it has carried over into your adult life. Word to the wise; prepare yourself emotionally and financially for those unpleasant possibilities.
Social Security, Medicare, and Medicaid: How secure are they?
The simple answer to the above question is “not very”! That is pretty scary for most of us. We have all been conditioned to the fact that Social Security and the other programs would not only be there for us in our retirement, but they would be safe and strong too. Not so fast.
With the Baby Boomers retiring faster than you can say “aloha” and Gen-Xer’s and Millennials having struggles in the job market and thus not contributing as much to the retirement tax funds, Social Security and other support programs are seeing funds dry up. Most experts predict that without some kind of legislative adjustments soon, these programs will be unable to maintain the current levels of funding by the 2030’s! How old will you be when that happens?
Think about this: even if you are able to work until full retirement age (currently 66)—which by the way most people don’t—with the maximum benefit you would be getting (based on 2016 numbers) $2,668.00 per month or $32,078.00 per person per year. If you are living on your own, that may not be enough to take care of all your needs unless you have other sources of income you have been saving and investing over the years long before you retire. That’s a really good reason to prepare for that real possibility by making sure you are fully funding you own retirement program while you are working. It must be a priority.
In Part 2 in this series, 21st Century Retirement Strategies, we will look at pensions, a rapidly disappearing retirement option, and some of the more viable retirement options. Look for it in my next post.
Did you start planning your retirement on your first day of work? Have you been taking care of your health? Do you believe Social Security will still be available when you retire?