5 Tips to Prevent Retirement From Scaring You
Retirement is an exciting time for most people; it means more time to relax and spend time doing hobbies you enjoy. However, not everyone looks forward to retirement. Once your full-time income disappears or lessens, it can be really scary if you haven’t saved enough to live comfortably. Also, some people worry that they will be bored or lonely when they retire. Whether you’re 62 or 25, you will have these fears at some point. There are plenty of reasons to worry; once you retire, your life will probably change considerably. However, there are ways to manage those fears. Here are five common questions that stem from retirement fears and ways to handle them.
1. Will I have enough money saved?
This is a fear that almost all people have at some point as they consider retirement. Whether you are five years away from retirement or thirty years, you have probably at least wondered if you will be able to save enough to maintain your lifestyle. If you’re lucky and you’re starting young, you can hopefully easily assuage your fears by making sure that you are saving enough right now.
You can use CNN Money’s Retirement Calculator to determine if you are saving enough, and how you should change your savings in order to meet your retirement goals. This calculator can help you even if you are quickly reaching retirement age and you haven’t saved enough, because it will at least help you determine where you should be. Regardless of however much you have saved, make it a priority to choose your investments wisely — keeping all your money in a savings account with little interest will not help you very much, but a diverse portfolio might.
2. Will I have adequate healthcare when I retire?
Medicare is available once you turn 65 (unless you have certain disabilities or Renal disease, in which case it might be available earlier.) Medicare offers hospital, prescription drugs, and medical insurance, in addition to some Medicare Advantage Plans. Medicare usually has a regular out-of-pocket cost. One consistent problem with Medicare is that patients often have a hard time understanding the plans, and also what is available through Medicare can change. Due to the Affordable Care act, healthcare for citizens over 65 is supposed to become less expensive, but this could change at any time because Medicare cuts are often considered since it is so pricey.
This can be one of the hardest fears to calm because it is so uncertain, and as such, your best bet is to save as much money as possible. You should also make physical fitness and overall health a priority, as you can’t control whether or not you get a disease, but you can keep your body healthy, which will save you money on medical bills in the future.
3. How will I handle long-term care?
Even if you pay off your house and have enough money saved to afford food, medical expenses, and other regular living expenses, taxes will continue to go up. So if you are mortgage-free, but you have to pay $500 per month on taxes, you will still need a regular income. In addition, even if you find a way to afford to stay in your home, you may eventually need more help from professionals than your spouse or family can provide. Of people turning 65, 70 percent can expect to use some type of long-term care sometime during their life.
You can give yourself some relief by investing in Long-Term-Care Insurance. Planning for the future will also help; in addition to regular savings, you should discuss the possibility of long-term care with your family (spouse, children, etc.) Many retirees fear burdening their children with huge bills, but most children want to help where they can, either financially or through helping care for aging relatives at home.
4. How will I afford unexpected expenses?
While it can be difficult to budget for long-term care since you don’t know how long or if you will need it, there are several other unexpected expenses that can come up once you retire. You may have to purchase a new car, travel unexpectedly, or pay for costly repairs to your home. Many people decide to rent as they get older in order to avoid having to make repairs, but unfortunately rentals can go up in price, whereas your mortgage payment usually won’t. Almost everything on this list comes down to saving enough money, and that is true for this item as well.
You need to set aside money for unexpected costs in addition to your regular monthly bills. You can save some money in this category by using your cars as long as possible, asking younger relatives to come to you instead of traveling to them, and by maintaining your home well now in order to pay for unnecessary repairs later.
5. Will I be bored when I retire?
This is a common question as people approach retirement. Although it’s great to have extra time to do what you love, it can also be a shocking change to go from working full-time to not working at all. Currently, 75 percent of Americans plan to work through retirement, and only 32 percent of those people are going to work because they think they need the money. Further, 39 percent of Americans who plan to keep working simply like to work. If you love your job and you want to keep working, you most likely can. You can also consider working part-time if your employer will let you change your hours, or you can look into other companies that offer part-time hours. This is one way to make a slower transition into retirement. If you have children and they will be moving out close to your retirement, you may fear having an empty nest as well; this affects most parents regardless of retirement age, but you can make the transition easier by trying a new hobby or joining a club.
There are several other common retirement fears. Many Americans worry that social security isn’t reliable, or that making money decisions as a couple will become more difficult as you age. You may have your own fears that are not on this list. The answer to most retirement fears is to save more money, but of course, this is easier said than done.