3 Top Costs that will destroy your Retirement
3 Top Costs that will destroy your Retirement are:
It is very easy to end up paying more than your share by making uninformed investment decisions. As a result, you end up essentially giving away money that could be used to fund your retirement.
Many retirees assume that they’ll fall into a lower tax bracket once they retire because they’ll be living on less income.
No one wants to pay more taxes than necessary. That’s especially true in retirement where every dollar counts. Knowing how your various retirement accounts will be taxed when you take withdrawals can help you manage your tax liabilities.
Tax rules are quite complex. Deciding how much to withdraw from which account at various times during retirement may require the help of a CPA or financial planner. Consider the money you spend hiring a professional to help sort out your retirement tax strategies an investment that may save you a lot in lower taxes for years to come.
- Long Term Care:
Retirees may need to change from living on their own to other forms of housing, such as assisted living, which combines care with housing, and independent living.
Even if a retiree is fit health-wise, it is advised to have the savings for at least one year’s stay at a nursing home. These fees are rarely covered under a medical insurance plan so you’ll need to budget for them on your own.
The critical mistake that many individuals and families make is to underestimate the costs of long term care and overestimate the amount of public funding available to pay those costs.
In addition, it is easy for healthy individuals to assume that they will never require long term care. The “I’m invincible” component plays a large part in this type of thinking. However, the world changes dramatically when cancer, heart disease, or a stroke enters the picture.
The solution to funding the high cost of long term care in the future must be shouldered by each individual because of the low probability that government funding will be available. Therefore, long term care insurance is the most obvious choice because it accomplishes two primary goals A) long term care expenses are paid either for care in a facility or at home, and B) a person does not have to liquidate all of their assets in order to pay the costs. In the end, having the right long term care insurance brings peace of mind to families.
Inflation risk is a new threat because the Federal Reserve has kept interest rates too low for too long.
To maintain quality of life, retirees must plan for inflation.
This means that if you are not making money, you are effectively losing money and damaging your retirement, even during periods of low inflation.
What could happen to your buying power during a decade of high inflation?
Inflation is very stealthy. Even when we don’t “see it”, as has been the case for most of the past 30 years, it’s still eating away at our portfolios in much the same way that termites can destroy your home. For that reason, we have to be aware of inflation – and prepared for it – even when we don’t think it’s happening.
Mintco Financial Independent Advisory Firm Buffalo NY and Tampa FL
Mintco Financial is a locally owned, independent advisory firm that is dedicated to providing a personalized approach to investments. As an independent and also fee-only wealth advisor, Michael Minter has absolutely no sales quotas or production requirements. His independence gives him the freedom to provide you with an objective and unbiased assessment of your financial circumstances.
Call us today to schedule a meeting at:
Buffalo NY 716-565-1300
Tampa FL 813-964-7100