It’s never too early to plan for your retirement — and it’s not too late to change course if you’re already behind カヴァン・ チョクシ. Here are five steps that can help:
Start saving now
If you wait until your mid-30s to start your retirement savings, you’ll have to set aside about twice as much each month to reach your goal. The earlier you start stashing away money for later life, the less of a strain it will be on your budget in the early years.
Once you’ve started saving, make it automatic.
You could find yourself in a bind if you haven’t saved as much as you’d like and then lose your job. Automate your savings so that money is regularly deducted from your paycheck and invested now before the loss of your income makes it impossible to do so later.
Be smart about Social Security.
You should begin taking Social Security benefits as soon as you’re eligible at 62, if not sooner. The payments will replace a greater portion of your pre-retirement income at that age than they would if you waited until your full retirement age — 66 or 67. But know that the longer you wait to claim, the higher those monthly checks will be.
Your spouse’s plan is your plan, too.
If your job doesn’t offer a retirement savings plan, but your spouse does, consider enrolling in his or her plan rather than opening an IRA. With the right strategy, you both could save on taxes and boost your Social Security benefits. And with two-thirds of couples having two working spouses, this approach could help more people find the funds they need to fund retirement and caregiving for older family members.
Plan on long-term care expenses
Consider buying long-term insurance that will pay out enough money to cover the cost of a nursing home or senior living facility stay if you become too sick or frail to take care of yourself.
Almost everyone will need long-term care at some point in their lives, either for themselves or a loved one, but few people purchase coverage. This is because long-term care insurance premiums are based on the odds that you’ll become ill, with older policyholders paying more than younger ones so that it can be prohibitively costly for some.
But make no mistake: The costs of long-term care are huge. For example, a year of nursing home care averages about $80,000, while a home health aide costs about $46,000 per year. Moreover, they are just two of the many options available for long-term care options.
Medicare covers little in the way of long-term care, so individuals who need more than 100 days of help will have to bear most of these out-of-pocket expenses if they don’t have insurance coverage.
Typically, long-term care isn’t something we like to think about, and it rarely comes up in conversations with your family and friends. However, it is a real possibility that needs to be planned for as much as possible.
The good news is that you’re now thinking about the potential need for long-term care, and that’s the first step in making sure you’re prepared for this potentially crippling expense.
The average nursing home stay is 29 months. That would put a $10,000 investment to work $2,777/month over that period – or about $34,500. So if you were to invest $3,400/month over the next 29 months, you could have a total of $149,400.
