You’ve spent a lifetime accumulating assets, working long hours and pinching pennies, all while giving your family everything they need and helping your kids through college.
Now that it’s time to retire and start enjoying the fruits of your labor, you may be apprehensive about drawing funds from the nest egg you’ve worked so hard to build. Going into retirement aware of future costs you will face and being prepared to address them is one way to keep your confidence high.
Here are four factors that can affect your assets in retirement:
This is the money you live off of, including everything from housing and transportation to food, entertainment and emergency expenses. The average American retiree spends about $3,700 per month—or about $44,600 per year.1 Your pension or Social Security may cover a portion of these expenses, but likely not all.
Health care expenses, including hospital costs, doctor bills, Medicare premiums and deductibles and expenses from critical illnesses, are likely the largest expenses you’ll face as a retiree. It’s estimated that a couple retiring this year will need $275,000 to cover health care costs in retirement.2 Of course, this estimate could vary, depending on your health, how long you’ll live and the future health care landscape.
Whether you receive in-home care or you require assisted living or a nursing home, the costs of such services can quickly devour your retirement nest egg. According to the U.S. Department of Health and Human Services, 70% of Americans over 65 expect to use some form of long-term care,3 and the average cost for a private home in a nursing home is $6,965 per month.4
Planning for your final expenses means considering everything from your funeral and estate taxes to probate costs, providing your survivors financial security and more. A funeral alone can cost up to $17,390.5
Are you ready to learn more about our retirement solutions that can help protect your financial security? Our insurance agents can help you find the insurance products that are best for you. Contact us today!
1The Motley Fool, Here’s What the Average Retired American’s Budget Looks Like, https://www.fool.com/retirement/general/2016/01/25/heres-what-the-average-retired-americans-budget-lo.aspx, June 2017.
2CNN, Health care will cost couples $275,000 in retirement, http://money.cnn.com/2017/08/24/retirement/health-care-cost-retirement/index.html, August 2017.
3U.S. Department of Health and Human Services, The Basics, https://longtermcare.acl.gov, February, 2017.
4U.S. Department of Health and Human Services, The National Cost of Care, https://longtermcare.acl.gov/costs-how-to-pay/costs-of-care.html, 2016, October, 2017.
5TheFuneralSite.com, Funeral Costs—A Detailed Price Breakdown, https://www.thefuneralsite.com/ResourceCenters/Costs/How_much.html, accessed December 4, 2017.