Smart Retirement Planning For Every Age

Solid planning and the right safety net will ensure that you enjoy your golden years

in Antioch, California. Before retiring she was taking home about $3,000 a month in addition to her share of her ex-husband’s pension. She hadn’t thought she would fully retire for some time, and she planned on working part time in retirement.

The impact of early retirement was rough. Pree had to file bankruptcy in the mid-1990s. “I had to walk away from some things because I had limited income. I wiped out that debt. It was a plus for me,” says Pree, who previously had good credit.

Pree was also forced to sell her condo. “I owed more than it was worth, so I walked away from it,” she says. She moved into an affordable senior citizen community, which helped her emotionally transition into retirement. For the last year, however, she’s been living with one of her children.

Retirement has been somewhat difficult, but Pree’s not complaining. “I didn’t plan it like this, but all things considered, I came out better than some,” she says. With Social Security, her ex-husband’s pension, and speaking engagements about health, she earns about $20,000. She also received a lump sum of about $40,000 for retirement from Kaiser, which she invested in an IRA. She taps those funds about once a year for expenses that come up, like the dental work she will need soon. Pree will also get her ex-husband’s full retirement benefit if she survives him.

FINANCES IN YOUR 70s
The 70s are often about slowing down and smelling the roses. But just as you’re catching your breath, you may begin to worry about outliving your assets. As you shift course into retirement, Don Roman, a senior financial planner with MetLife Securities in Atlanta, offers some direction:

CURB YOUR HEALTHCARE COSTS
The biggest threat to many retirement portfolios is medical costs. If you don’t have private medical insurance, you’ll need to seek out Medicare. Log on to www.medicare.gov to find out about plan costs and long-term care options. To cut costs, consider alternatives like buying prescription drugs through mail order. You should also have a stash of money just to pay for medical extras and prescriptions, as those costs are likely to increase, says Roman.

According to the National Academy of Elder Law Attorneys, the average annual cost of nursing home care in the U.S. is more than $56,000, with 36% of that paid out of pocket by individuals and their families. If somehow you hadn’t gotten around to getting long-term care insurance until your 70s, prepare yourself for sticker shock. When reviewing policies, pay particular attention to inflation protection, the waiting period, coverage, and the period of coverage to ensure that you have proper insurance for your needs. Then look for added bonuses. Some policies even allow supportive services to be provided by a spouse or other relatives. “You want to be clear on what your policy offers and doesn’t,” says Roman. For more information, check out www.life-line.org, sponsored by the Life and Health Insurance Foundation for Education.

TAP INVESTMENTS WISELY
At age 70 , Uncle Sam requires you to start withdrawing

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