Retirement isn’t what it used to be; between the rising cost of healthcare and people living longer, your retirement savings might not allow you to retire into a life of leisure as you may have hoped. When it comes to money and retirement, the majority of Americans don’t have enough in their emergency fund to cover a $1000 medical expense and that creates a lot of anxiety as retirement age approaches.
Add all that to the shocking reality of the price tag of senior living--most senior living communities cost an average of $3,500 a month, and that number only goes up if you need assisted living or nursery care. The anxiety of having enough retirement savings is also worse for women. Studies have found that women typically have 25 percent less saved for retirement by age 65 than their male counterparts.
So, what can you do to prepare for your retirement, or save money once you’ve retired? We have some tips for taking some of the stress out of the relationship between money and retirement:
The earlier you retire, the lower the amount of money you will receive from Social Security. Although full retirement age is 66, if you can delay retirement until age 70, you can up your income from Social Security by 8 percent. And postponing your retirement for a few years could also help offset the cost of health care. By staying on an employee-provided insurance plan, you can save money on certain things that aren’t covered by Medicaid.
Consider Working Part-Time
Believe it or not, many people are choosing to downgrade to part-time work instead of full retirement. It allows for the opportunity to still have an income while also taking more time to rest after years in the rat race. In fact, Maddy Dychtwald, an author and founder of Age Wave, told the New York Times that “seven in 10 pre-retirees say they plan to work in retirement, and the fastest-growing segment of the total American workforce is those 55-plus.”
Invest In Long Term Care Insurance
As people continue to live longer, they are also faced with the rise of chronic health conditions, such as diabetes and cardiovascular disease, and the increased cost of medical care. Together, this can be a disastrous combination for your retirement savings. But long term care insurance can cover a range of expenses for daily living activities, such as bathing, dressing, preparing food and housework.
Think About Aging At Home
Moving to a senior living community or assisted living facility is not ideal for everyone. For both emotional and financial reasons, many seniors are instead aging at home, or “aging in place.” If you own your home and your mortgage is paid off, you could save thousands of dollars a year in living costs by aging at home. By making small adjustments to ensure your safety as you age--from modifying the living area to accommodate mobility issues, to investing in a medical alert system--the savings you will yield in the long run will be worth it.