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Retirement has changed a lot in the last twenty years, so why should the way we plan for it stay the same? Here are four reasons you should rethink how you plan for your own retirement or invest to support the retirement of others.
Today’s retirees will collectively enjoy some of the longest lifespans humans have ever seen. In decades past, planning for retirement meant ensuring someone would have enough income to support them until they were, at most, in their mid-eighties. By that time it was expected the elderly would be unable to do much outside the house. But those at the younger end of the Baby Boomer generation could live actively until their mid-eighties or beyond, and many may even achieve centenarian status. That means retirees and retirement planners alike need to find new ways to make the same amount of money go further.
Social Security Changes
Some recent changes to Social Security have eliminated loopholes that retirees sometimes depend on exploiting. For instance, couples will no longer be able to have one partner draw spousal benefits from the other without drawing on their own personal Social Security. Another strategy that can no longer be used is to file for benefits and then suspend them. In the past, this meant family members would still receive benefits even though the main recipient had suspended theirs. However, the SSA has set up some rules to cover those already near retirement age, so depending on your situation, you may be one of the last people to be able to benefit from these tactics.
It’s no secret that healthcare costs are astronomical, so these should already be part of your retirement planning. But pending changes to Medicare mean even more money must be set aside. Many seniors will see rises in premiums in the next few years. But that won’t mean it’s cheaper to get treatment: deductibles are also likely to rise, meaning you’ll pay more out of pocket to have the insurance, and more out of pocket before it kicks in to cover you. Medicare Part D, which covers prescription drugs, will also be undergoing revision. Part D is an optional part of Medicare, and its premiums will also be rising.
If you had to choose, would you say you live to work? Or that you work so you can live? When it comes to retirement planning, certainly you want to live without having to work at all! However, the rising sense that we should only have to work to live, not live to work, makes retirement planning more of a challenge than ever. When people are living paycheck to paycheck, or simply covering expenses with their salary but enjoying their free time outside the office, they have less discretionary income to put into savings or invest.
If you’re finding yourself strapped for a nest egg to get started with, or are concerned about rising premiums or expenses, consider selling a life insurance policy in a life settlement. You can visit our calculator today to see if you qualify.