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Tackle These 3 Issues Before You Retire Early

10/16/2018

3 Comments

 
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Are you considering early retirement? If so, you’re not alone. For many Americans, early retirement is the ultimate financial dream. Making the dream a reality requires focus and disciplined saving.
 
Unfortunately, many workers may not be able to retire at all, let alone retire early. A recent analysis of the Federal Reserve’s 2013 Survey of Consumer Finances found that the average American couple has only $5,000 saved for retirement.1
 
However, if you’ve saved a significant amount of assets, it’s possible that early retirement could be in the stars for you. There are a few challenges you’ll need to address before you leave the working world though. Below are three such items. If you haven’t planned for these issues, you may want to do so before you consider retiring early.

How will you pay for health care?
 
Think Medicare will pay all your health care expenses? Think again. You’ll likely have significant out-of-pocket costs above and beyond Medicare coverage. According to Fidelity, the average 65-year-old retired couple can expect to spend $280,000 in retirement on things like deductibles, premiums, copays and more.2 That figure doesn’t include any potential long-term care costs.
 
Do you have a plan to pay for medical expenses? If you retire early, you may have to pay out of pocket or buy a private policy before you’re eligible for Medicare. Consider maxing your contributions to your health savings account (HSA) and possibly looking into a long-term care insurance policy.

How will you manage your spending in retirement?
 
A budget can be your most powerful financial tool in retirement. It helps you see where you spend your money, how much you can afford to spend and what changes you may need to make to stay within your income.
 
Developing a budget is only the first step, though. You also may want to take your retirement budget for a test drive. That’s especially true if you hope to live on a tighter spending level after you retire. Try living on that spending level for three or even six months to see if it’s feasible. If so, retirement may be a possibility.

How will you spend your free time?
 
Believe it or not, boredom is a serious challenge for many retirees. They struggle to transition to a free and clear schedule. Without work, they may not know how to fill their time or they may feel that they lack purpose.

Some retirees fill the void with costly activities like travel, shopping, and new hobbies. The result is that they spend too much money in the early years of retirement and leave themselves in a challenging position in the later years.
 
If you don’t know how you will spend your retirement, you may not be ready to stop working. Develop a plan not only for your money in retirement, but also for your time. Think about what your ideal day would look like or what activities may be meaningful for you. Consider ways to enjoy yourself without busting your budget.
 
Wondering if you’re ready to retire early? Contact us at Beacon Retirement Planning Group. We can help you analyze your needs and objectives and determine whether early retirement is right for you. Let’s connect soon and start the conversation.
 
1http://www.marketwatch.com/story/the-typical-american-couple-has-only-5000-saved-for-retirement-2016-04-28
2https://www.fidelity.com/about-fidelity/employer-services/a-couple-retiring-in-2018-would-need-estimated-280000
 
Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.
18087 – 2018/10/1

3 Comments
Gillian Babcock link
6/27/2019 02:26:27 am

My uncle is planning to retire after three years and he wants to make sure that his funds will be enough. It was discussed here that he should consider how he will manage his spending on his retirement. Furthermore, it's recommended to consult experts when in need of quality retirement planning services.

Reply
Kelly Carter link
6/28/2019 12:13:43 pm

Hi Gillian - We appreciate your taking the time to read up on "Tackle These 3 Issues Before You Retire Early". Your uncle is very lucky to have you helping him out, pre-retirement.

It is true. Managing spending in retirement is a huge factor and one many people fall short on planning for. We meet with individuals like your uncle often. We have a proprietary process (The Horizon FORMula) where we are able to get these people to a point where they have monies secured for the long haul, immediate need, and even for those 'rainy days'. We want to make sure our clients don't outlive their money.

I would be happy to speak with you and your uncle, and answer any questions you may have. We can provide a free retirement analysis to ensure that, when the time comes, he is able to enjoy his post-retirement years as he intends to.

Please give us a call at (951) 302-5227 to arrange a time for us to speak further. You are also welcome to email me directly at [email protected] I look forward to assisting you and your uncle any way that I can.

Take care,
Kelly Carter

Beacon Retirement Planning Group, Inc.

Reply
Angela Waterford link
11/8/2019 09:58:16 am

It would be nice to retire early since my uncle warned me that I shouldn't work up to 65 years old just so I will remain penniless because of medical issues, and I still want to be able to travel the world while I'm still young. I agree with you when you said that being able to retire early is a great financial dream everyone aspires to do, and I wish to be able to do this as well. In my opinion, I think I should consult a financial service so that I'll be able to fulfill this desire.

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