When it comes to what retirees dread the most, leaving their loved ones and facing what lies beyond take a back seat to running out of money. A dried-up retirement fund is, indeed, a horrible prospect to face, but careful planning and a bit of action can secure your funds for the rest of your days.
Insufficient Retirement Funds
Most American retirees have less than $100,000 on their retirement plan, and emergencies and hospital bills can further reduce that amount. It doesn’t matter if you work in Walmart or At&T, a retirement plan will protect you should a serious medical condition put you in dire straits. Retirees can apply for free Medicare if they are over 65, but Medicare A and B (the types of Medicare you receive upon reaching 65) do not cover the cost of prescription drugs or extended hospital stays. Building up your nest egg could somewhat protect you from expensive hospitalization costs, but you should also consider expanding your Medicare coverage (to include D) before you retire. Nationwide unemployment is at an all-time low. Your company may find it difficult to find a capable person to take over your position, so consider staying for a few more years to add a bit more money to your retirement plan. If you’re working, money keeps coming in, but once you retire, you’ll only be relying on limited funding.
Tax-Free States
Retirees are flocking to states like Florida, Texas, Nevada, and not just because of the warm weather. These states are considered retiree-friendly, and there are several in the US that won’t tax your 401k. While your retirement fund is safe from the government’s hands, you need to be careful with hidden sales or service tax, which can increase your expenses. Choose a more rural setting for your home. The cost of living in an urban center can be significantly higher compared to a quiet rural town.
Health Matters
One of the best things you can do to ensure your finances don’t get ruined by medical costs is to lose a little weight. The majority of senior hospital admittance is related to or exacerbated/compounded by obesity or being overweight. Researchers at George Washington University actually estimated the annual cost of obesity in dollars, $5,000 for women and $3,000 for men. The added expenses include more frequent hospital visits, extended hospital stays, heart medication, and insulin for diabetes. Obesity also affects your overall mobility, putting a lot of pressure on your knees and increasing your risk of suffering a fall. The right diet and regular exercise can trim your weight to manageable levels. Walking down the street, trimming your garden, or playing with your dog can be enough to keep your weight down. Physical activity maintains your musculature, strengthens your bones, and keeps your mind active, potentially warding off Alzheimer’s.
Medical costs are the primary reason retirees are running out of money. Even with an excellent retirement plan, you can fall into the red once hospital costs start racking up. Don’t just invest in your 401k, take time to invest in your health, and ensure a healthier (and less costly) future.
