Planning the retirement transition

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Getting ready to retire? Invest some time in planning the transition to senior life in these areas, and you’ll reap the rewards:

Retirement. Employee Benefit Research Institute, or EBRI, puts out an annual retirement confidence survey. In the 2014 survey, it reported that only 44 percent of workers have tried to estimate their retirement savings needs. Do you have a spending plan allocating income in retirement and what your income sources are in retirement? (I like to call it a spending plan instead of a budget, because people don’t like to budget. Do you?)

Long-term care. What’s your long-term care strategy? Medicare doesn’t cover long-term care. Do you have a long term care policy? The wealthy should be able the get by without it, as should people who qualify for Medicaid. The middle class need a strategy to meet long term care needs. There are insurance alternatives to a long-term care policy, like a combo policy which is a life insurance policy with a living benefit rider.

Health care. Being on Medicare, doesn’t mean that you don’t have to worry about health care costs. Fidelity Benefits consulting does an annual retiree health care estimate. The estimate for 2014 is that a retired couple will need $220,000 in today’s dollars to cover medical expenses in retirement — and that doesn’t include any costs associated with nursing home care. The estimate applies to retirees with traditional Medicare insurance coverage.

Social Security. What’s your strategy for taking Social Security? Getting a professional recommendation from a service can help you make better decisions that could result in you receiving thousands more in benefits.

Beneficiaries. There’s never a bad time to review the beneficiaries on your account, so make sure that your will is updated, along with your health care directive. Do you keep a listing of accounts, insurance policies, and professionals like your accountant, attorney, and financial services professionals? If not, now’s a good time to start.

Retirement income. Do you have a game plan when it comes to how you’re going to tap your retirement nest egg over time? How you want your asset allocations to change as you age? What’s realistic in terms of withdrawals from the portfolio? If you haven’t been working with a financial services professional, it may be time to hire one on a hourly fee basis to review your portfolio and other retirement income sources available to fund your retirement income needs.

Wrapped into these retirement income needs are the life goals you have for yourself, or as a couple, in retirement. What do you want to do or accomplish in your golden years? What’s it going to take to realize those goals?

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