4 Uncomfortable Truths About Retirement


4 Uncomfortable Truths About Retirement

Posted by RDW Financial Group
12 months ago | August 7, 2017

Like most people, you can’t wait to retire. You’re picturing leisurely days, doing whatever you want with your time, without the stress of a work schedule or commuting anywhere. It’s a beautiful dream, and there are certainly a lot of enjoyable times coming your way. But there are also a few uncomfortable truths about retirement, that many people avoid. Since we want you to be well informed and prepared, we’re sharing some of those truths with you. But don’t let anything scare you; we can offer solutions to help you.

You don’t know how long retirement will last. It used to be that people retired around age 65, enjoyed retirement for a few years, and passed away. The good news is that today, our life spans are much longer. A man who is 65 years old today can expect to live to about age 84.3, whereas a woman will live to about 86.6 (on average). One in four people can expect to live past age 90, and one in ten will live past age 95! A longer life is great, but that means you could spend 20 or 30 years in retirement.

Retirement can be boring. During your working years, all you want is to escape your alarm clock, your commute, and the office life. However, most people who retire without a plan to stay busy actually report that retirement is boring or unfulfilling. So before you leap into retirement, think about what you’ll be doing with your time.

Your healthcare won’t be free. Many people expect that Medicare will pay 100 percent of their medical expenses in retirement, but this isn’t actually true. You’ll be paying for your premiums, for both Medicare and any supplemental plans that you choose. You will also have co-pays, deductibles, and uncovered medications or equipment to worry about. The average 65-year-old retiree today can expect to spend about $260,000 on healthcare throughout retirement. And that’s not even counting the cost of long-term nursing care, if you ever need it.

Taxes might affect you more than you think. Hopefully you will establish a stream of income aside from your Social Security benefits. But if you earn above a certain threshold, you could pay taxes on those benefits. You will also owe income taxes on certain types of retirement plan withdrawals, unless you made a plan for nontaxable income.

Like we said, there’s nothing to panic about. If any of these facts concern you, give us a call. We’ll review your retirement income plan and help to ensure that you’re really ready to retire.

Source for statistics: Social Security Administration and Fidelity’s Retiree Health Care Cost Estimate.

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