Retirement is probably something you have striven for and dreamed of ever since you became an adult. You probably have many plans for yourself after you retire such as: ?traveling, relaxing, volunteering and taking up new hobbies?but you may be underestimating what retirement entails in the modern age.
Most people know that saving up is crucial if they want to enjoy their retirement years. However, people are living longer than ever?decades and decades after they retire?so saving alone isn?t enough.
Get Insured Now for Care
You wish for many years of health and happiness to enjoy your retirement, but sometimes even the best plans go awry. Becoming a senior in need of assistance?either at a nursing home, at a retirement community or with an in-house caretaker?is a real possibility, and all of these long-term care options can be costly.
Your savings could be wiped out sooner than anticipated due to these costs, and the financial burden will fall on your family or the government, who may not be able to provide you with the care you need. ?With the best long term care insurance options, this won?t be an issue. Insurance can cover all or a portion of the costs so your retirement dollars go much further than they otherwise would.
Draft a Living Will
Set up a consultation with a lawyer and draft a living will today. Many seniors realize that they ought to draft a will in the event of their death, but they forget that a living will is every bit as important, too. In the event of illness that incapacitates you or otherwise diminishes your ability to think critically, you need to have your wishes made known now, when you?re in good health.
Perhaps you already know you?d be willing to go into a nursing home in the event of an illness such as dementia, to minimize the burden on your family; but in the event that you were afflicted with the illness at a later time, you wouldn?t be able to make these decisions for yourself. If your loved ones know now that you?d be okay with receiving care in a nursing home facility in the event of debilitating illness, they?d feel better knowing they have the legal power to grant your requests.
Designate Power of Attorney
Similar to the living will, designating power of attorney is something you should do as soon as possible. If you?re unable to make decisions for yourself in the future, a spouse, child, family member or trusted friend will need the legal recourse to pay your bills, sign checks and sign paperwork as your legal representative. When drawing up a living will, talk to your lawyer about power of attorney.
Downsize Now While You Can
Some retirees make the potential mistake of saving up for their ?dream home? and then purchase it when they retire. However, in your senior years, you need to stretch money for longer than you might think. A more sensible plan is to downsize your home once you retire, either by buying a smaller home that requires less maintenance or by renting a property, so you can enjoy these benefits:
- Less or no money spent on property taxes, which means more money in your savings.
- Less property to take care of, as your body may not be able to handle tasks such as shoveling snow, weeding and cutting the grass over time; if you rent, the landlord takes care of these things for you.
- Less clutter in your home:? donate, sell or give away unnecessary items now, so you don?t leave a cluttered home for family members to deal with.
- Money made on the larger house sale is more money you can put into your savings.
Balance Your Budget
Plan on making the most out of your retirement, but also take into consideration these other suggestions, as chances are you?ll be sticking around to enjoy retirement for decades to come. That means of course, you can splurge on the trip of your dreams every few years, but don?t spend thousands each year traveling the world.
Take a serious look at how much you have, and speak to a financial representative about how much your accounts may earn you over the next few years. Divide that by 10 to 20 years; that?s what you have to work with each year, including emergency funds.
Image from Flickr?s Creative Commons
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Shelley Craig is a Wisconsin-based Estate Planning attorney who has practiced law for the last 20 years. She helps clients and their families every day to draw up wills, living wills and power of attorney documents; she firsthand realizes the importance of these documents in the event of unexpected illness or injury.
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