As you approach retirement, it’s important to understand how much income you’ll need to enjoy the retirement lifestyle you envision.
Take a few moments to jot down your actual expenses as they stand today. Think about your priorities in the future and try to determine whether your expenses will stay the same, increase, or decrease by the time you retire. Here are some things to consider as you undertake this exercise:
- While some expenses (like a mortgage and work-related costs) may disappear entirely, other expenses, particularly health care, are likely to rise
- While most Americans are automatically entitled to Medicare coverage once they turn 65, Medicare won’t cover all of your health-care expenses
- Medicare does not pay for long-term care, and statistics suggest that more than half of all adults over age 65 will need some form of long-term care (per a Jan. 2021 report from the Department of Health & Human Services)
- Don’t forget about inflation – Currently, the average annual cost of nursing home care averages around $75,000. If costs rise, at a minimum 3% every year, in 20 years the annual cost would be over $135,000
Take the time and do the math today. Your future self will thank you. If you have any questions about what “your number” should be, please reach out. We’re here to help you make the most of your future.