Whether you want to admit it or not, the Baby Boomer generation is a large demographic. They have a large impact on society as the oldest members of the generation as well into retirement and the youngest are just starting to consider stepping away from the work force. The sheer numbers of the Baby Boomer generation will continue to have an impact on the economy and healthcare for decades to come. Keep in mind that they are living longer than past generations thanks to advances in healthcare and medicine. Why does all this matter? Well, it matters because any large generation moving into retirement age is going to require resources and will have economic impacts. For example, an a large aging population will most likely put a big strain on Medicare or Medicaid. This could have huge impacts on government budgets and how other governmental programs get funded–particularly programs that may impact younger generations. As for the economy, with more Baby Boomers passing away as time goes on, markets that needed them to survive may find the going tough as their customers are no longer there or no longer need their services and/or products. There is also the fact that aging parents and relatives can put a serious financial and emotional strain on their families. This is important to think about for both younger generations as well as those moving into retirement. If you are younger, you will need to think about whether you have the finances to care to for an aging parent. You will also want to have discussions with that aging parent or relative about the type of care they want and the finances involved. If you are part of the Baby Boomer generation and moving into retirement, then you may want to start talking with your children or grandchildren (or nieces or nephews) about the type of care you want and what your finances will allow. This doesn’t have to fall on one generation, but should be a multi-generational effort to make sure that all are on the same page and understand what needs to be done. If you need help with the financial discussions, you should speak with a certified financial planner or wealth manager. They can help you to get an idea of where things stand and what products/services you may want to consider in the future. There has also been a lot of research done on the aging Boomer generation, so you may also want to read up on that and the potential impacts that may lie ahead as Baby Boomers age.
You are probably well aware that healthcare is something you will need to plan for in retirement because, unfortunately, as we age, our medical expenses don’t go down. Therefore, it’s important that you have some type of healthcare plan in place when you retire. There are a few ways to go about this. If you are retiring before your spouse, you could always join their plan, which most companies allow. If you are over age 65, you are eligible for Medicare, which many Americans rely on for healthcare coverage in their twilight years. Another option is to purchase health insurance through your state’s Health Insurance Marketplace. Finally, there is also the health savings account (HSA) route, which has become somewhat popular in recent years. If you have an HSA that you’ve been able to grow into a reasonable chunk of change in recent years, then you might include that as part of your medical expenses coverage. Regardless of what you decide to do for health insurance during retirement, you will want to do your research. That means seeing what your options cover, what their costs will be, and whether each one fits what you are looking for regarding medical coverage. You don’t want to pick a plan that’s too pricey or doesn’t cover illnesses/conditions that you may already have or are highly susceptible to. However, you also don’t want to overpay for coverage that may eat a good chunk of your retirement savings unnecessarily. There are a lot of online resources available to help you research and even pick the plan that’s right for you. If you are worried about costs and how they may impact your retirement finances, you should also speak with a certified financial planner, who should be able to give you an idea of your budget or financial thoughts.
If you know anything about Medicare, then you are probably aware of the fact that there are choices to be made when it comes to selecting a plan that works for you. There’s a good chance that you, like many retirees, will rely on Medicare to help cover your medical costs in retirement, so you will want to know what your options are. If you are near retirement, you’re probably familiar with terms such as “Part B” or “Part D Prescription Coverage” already and, thus, know that you will have to make some decisions about your coverage. This means researching the plans that are offered and understanding what the advantages and disadvantages are to each choice. You will want to see what each option covers and doesn’t cover. Such things to pay attention to is whether a choice allows you options when it comes to choosing a doctor, whether certain treatments are covered, and what potential gaps in coverage may exist. Regardless of what option you choose for Medicare, keep in mind that Medicare changes fairly regularly, so you will want to review your coverage each time you enroll (most likely yearly). I understand that choosing a proper Medicare plan can be a bit overwhelming, however, it’s something you may have to do because you will need medical insurance in retirement. The good news is that there are lots of resources online that can help you break down the coverage options and which you can use to educate yourself about what your options are.
Over the next 365 days, policymakers–at both the state and federal levels–have the potential to shape retirement for many for decades to come. Some such policy opportunities may be straightforward in impact while others may be more subtle and long-term. For example, how politicians and regulators go about handling any current economic issues could have affects on how people save currently as well as what future retirement costs may be. Another example might be whether a more liberal-leaning House of Representatives combined with similarly-situated state legislatures may turn their sights on programs such as Social Security and Medicare and look to shore up such programs so that they can continue to serve current and future generations. On the flip side, other legislatures with more conservative leanings may seek to cut into such programs, which may lead to higher future retirement costs and expenses. However, one area that there seems to be bipartisanship is expanding opportunities for American workers to save for retirement through the use of employer retirement accounts. Much of these efforts have focused on opening doors for small businesses to offer retirement savings accounts to employees that were in the past considered to costly for such employers. These are just a few of the ways that politicians and policymakers could impact retirement for you and those of younger generations. This post is also intended to encourage you to remain knowledgeable as to what is happening in both state and national legislatures and to understand how policies may impact you so that you can make the best decisions regarding your finances and retirement plans.
Whether you want to admit it or not, healthcare costs are going to be a big factor in your retirement. Yes, you can get help in the form of Medicaid or Medicare, but chances are you will have to pay for at least some of your healthcare costs in your later years. It’s better to recognize that now, while saving for retirement, than later on when you are in retirement. I understand that you most likely won’t be able to predict exactly what your healthcare costs will be in the future, but you can at least look at what your projected income might be and how that may factor into your eligibility for Medicaid or how much you may end up paying with Medicaid. Taking those costs into account while planning for retirement can ensure that you have enough saved away. If you realize that you won’t qualify for Medicaid, that will tell you that you will most likely need to save more to cover the potential future healthcare costs. The potential costs of retirement healthcare can also factor into the type of investments you make. You may want to invest in assets that will guarantee returns well into the future and which may provide money later in retirement that can help offset costs associated with aging. As always, if you have questions about incorporating healthcare costs into your retirement planning, you should speak with a certified financial planner to make sure you are making the right moves.
Medical expenses are one of the biggest retirement savings killers. All it takes is one unplanned medical emergency or issue and the savings you worked so hard to build up can be decimated or your retirement plans left greatly altered. Thus, along with your finances, you should also be thinking about health insurance in retirement and how you plan to cover yourself once you stop working. This will require exploring Medicare options as well as possible employer options (i.e. if it is part of a retirement package or retirement benefits). As part of that process, you will want to determine what those insurance costs will be and how that factors into your retirement savings. If you have questions regarding saving for retirement, you should speak with a certified financial planner.
With each generation comes new medical breakthroughs and refinements that allow people to live longer, healthier lives. That longevity gives people more time to pursues interests, careers, education, and enjoyment that past generations may not have had. Longer lifespans also require more financial planning, especially if retirement age remains the same as past generations. Whereas past generations may have put little to no thought into retirement planning, current generations are planning on 20-30 year retirements due to the ability to live longer. This means that the amount that must be saved for retirement is increasing with each generation and that saving needs to start earlier and earlier in order for people to meet retirement’s financial requirements. Furthermore, the safety nets that helped to keep retirement costs down for past generations–social security, medicare, medicaid–are changing in the current political and social climates and will most likely either not exist or exist in a drastically different form when today’s younger generations (those under 40) retire. Those changes will only add to the burden of retirement saving. While living longer is a good thing for society and individuals, it also means that financial planning and retirement saving must start early (preferably when people reach their early 20s) in the lives of those who are a part of that society.
Retirement should be a relaxing time in your life. It should be a time spent with friends and family while pursuing hobbies and interests you didn’t get to spend much time with while you were working. However, retirement can quickly turn into a nightmare when unexpected costs (most likely health-related) arise. While it’s impossible to predict the future, you can take steps to avoid unexpected financial shocks, or at least soften the blow. One easy way is to build in extra money into your retirement savings. That could be done many ways, from saving more than you need to having a plan in place to sell off assets should you need the money. When planning for retirement, you will also want to research Medicare supplemental plans or Medicaid, which can help with health care costs. Since it is highly likely that health care will be your big expense in retirement, you will want to take steps when saving or planning for retirement to account for that. If you are relying on stocks to help fund your retirement, you will want to make sure that your portfolio is diversified so that you don’t take damaging hits should markets go down or fluctuate. If you have questions regarding how to protect yourself financially during retirement, you will want to speak with a retirement professional or a certified financial planner.
The end of 2017 brought significant changes to the tax code as a result of the recent tax reform bill passed by Congress and signed by President Trump. How exactly those changes will affect the economy remains to be seen, but what is known is that it will have an impact on individual taxes. As with any significant tax code changes, you should take the time to understand how those changes may affect your retirement and estate planning strategies and plans. The most recent reforms widened the gap between state and federal taxes, which could have a huge impact on how much retirement money you may need to meet your current plans. Furthermore, there could be changes coming to Social Security, Medicaid, and Medicare in the coming years as a result of the legislation, which may impact how people plan to fund retirement. Now, especially around the beginning of the new year, is a good time to review your retirement plans and educate yourself on how the new tax reform will impact your retirement plans and whether you may need to change your strategies and goals.