Planning will help you to have a unified vision of retirement with your spouse regarding where you will live and your lifestyle so that you can live on your own terms.
Studies say half of all Americans believe you can’t plan your retirement expenses accurately, and a whopping 64% fear running out of money during retirement more than death. With the financial landscape changing dramatically in recent years, you should be worried about retiring and planning for it. Some benefits of retirement planning:
Know How Much You Should Have to Retire
Recent financial surveys indicate most adults have no clue about how much they need to retire. Estimates vary wildly between $500,000 and 25 times the last drawn salary. Despite the knowledge vacuum, only 25% of the people thought it fit to consult a financial advisor. The main benefit of retirement planning is you know how much you should have before retiring. It will also tell you how to save and invest to achieve your target amount. However, the calculations can be complex and advise customized to be effective. A certified financial planner like FBB Capital Partners can help you develop the best approach to retirement.
Peace of Mind
An increasing number of working-age Americans say they are suffering from anxiety due to financial stress that can result in sleepless nights and loss of productivity and negatively impact their health. Planning well for retirement can eliminate much of the stress and you can enjoy your life better.
Make Shrewder Decisions
Some of the typical financial decisions you will need to make at some time or the other, include whether to change jobs for better financial health, how to maximize employer benefits, how to reduce taxes, when to take social security, when to buy a house or go on an expensive vacation, and more. Every financial decision you make has an impact in the near term or the long term, and you will likely elevate your anxiety level with every major financial decision you need to make. However, when you know where you are in your mission of achieving financial goals, you will have more information to make better choices.
Prepare Better for Healthcare Costs
With more people living longer, you will require long-term care extending well into your retirement years. According to an AARP study, 15% of people will need long-term care, extending to five years or more. It is one of the reasons why the sales of long-term medical insurance are booming. Like life insurance, the sooner you buy health coverage, the lower your premium. The premiums averagely increase by 2-4% if you buy a policy in your 50s, but the annual increase can be between 6-8% if you buy when you are 60 or more. According to Forbes, buying longevity insurance can help.
There are many other benefits of planning for retirement. Buying a home sooner will enable you to have substantial equity at the time of your retirement, and that too at today’s prices. Financial planning can also help you to reduce your tax burden. More importantly, planning will help you to have a unified vision of retirement with your spouse regarding where you will live and your lifestyle so that you can live on your own terms.