Top Retirement Mis-Steps Part 2

Each week I share financial news, retirement advice, and budget tips on KOLR 10’s Ozarks Live.  

This week I discussed part 2 of the 5 Retirement Mis-Steps to Dodge

We all want to OWN our retirement.   Before you choose a college you do research, visit campuses and consult with friends and family.  Before you buy a house you save, plan, have inspections and go on tours.  The same process should be followed for planning retirement. Research products, consult with advisors, make a plan and save. You can OWN your retirement by preparing -ahead of time.  

Last week we discussed the first 2 retirement mis-steps to dodge, you can see that blog by clicking here.

#3 Ignoring The Cost Of Healthcare in Retirement

Often people are under the impression that they are going to be healthy forever, and therefore may ignore the cost of healthcare in retirement.  Healthcare is the biggest decision one has to make as they approach 65 or you may be penalized. You will need to decide between a Medicare Supplement or an Advantage Plan. The answer to that is whatever fits your particular need, health status, and cost. If you want to eliminate health as a financial worry for the rest of your life, then, a Medicare Supplement, while they are more expensive, is the best option. A Medicare Supplement is going to pick up everything that Medicare does not.

Advantage Plans a lot of times are either a zero or a low-cost premium. If you have to go with an Advantage Plan, that’s fine. However, you will want to plan for how much out-of-pocket you are going to have exposed for any given year and earmark money for that.

Addressing healthcare with a plan may alleviate the devastating effect of a sudden illness in the future.

#4 Not Saving Enough To Account For Inflation

Inflation is that unknown, hidden danger that’s sitting back there behind the scenes, that is taking money out of your pocket and you don’t even know it. Saving enough to meet your needs today may not be enough to reach the same standard of living in the future. 

About two weeks ago, the Fed announced inflation has been averaging about 2% the last 20 years. However,  in the last 45 days, it was creeping above 4%. Most recently they announced the current inflation is sitting at 5.4%³. 

For example, gas in Missouri has increased 33% since January. 1

So now, if you look at the cost of vehicles, cost of freight, the cost of what’s happening due to increased fuel cost. What’s that going to do? It’s going to put a burden on goods and services which will make all the prices rise. So we have to be aware of that when we are trying to plan for the future.  Here is a chart of how inflation of the past 20 years has affected the prices of everyday items.

#5 Not Preparing For The Possibility Of Long-Term Care

Long-term care is a huge crisis in the United States. I have dealt with two or three different cases in the last three or four days. In every one of them, they were not prepared. They’re shocked at the price. The average cost of care currently is around $5,900² per month per person. And if you’re not prepared to pay that out-of-pocket, you need to be making provisions where you can. There are ways to do it through trust planning. Ways to do it through insurance. Sometimes you will just have to spend down and get on Medicaid. 

Your retirement needs a roadmap, that’s where we come in!  Call the office at 417-882-1800, and we can have a discussion. Or click here to schedule an appointment. I’ll be glad to sit down and have the discussion to help you and your family create a plan.

 

For a copy of my booklet the 5 Retirement Mis-Steps, fill out the info below:

If you have a financial question for Bruce, visit his website: resourcecenterinc.com, or give him a call at (417) 882-1800, and he can fix you up with this handy-dandy pamphlet here that will start you on your path, and we will visit the next three tips next week.

Catch Bruce Porter’s show Dollars & $ense Tuesdays at 3pm on KOLR’s Ozarks Live

Visit our YouTube page for more videos

 

Sources:

1-https://fox4kc.com/news/missouri-gas-prices-rose-50-in-past-year-highest-cost-per-gallon-since-summer-of-2018/

2-https://www.medicaidplanningassistance.org/nursing-home-costs/

3-https://www.usinflationcalculator.com/

 

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