It is surprising the number of retirees who do not have a Financial Planner.
I personally know many clients who have done an exceptional job handling their own finances, but not everyone is skilled at doing this.
Even those with a Financial Planner have mostly focused on building a nest egg and spending more time focused on income growth and monthly retirement income, and less time on the cost of possible future health expenses.
For the majority of those who are about to retire or are in retirement, there are things you can do to not out live your money.
If you are still working, middle aged, and not ready for retirement. Here is an estimated timeline that you should consider when starting to plan for retirement:
1) At age 50 start making catch-up contributions to your 401(k) and maximize your contributions as soon as possible. Once you have maximized your yearly 401(K) contributions then start putting monies into an IRA account. This way you can maximize your 401(k) and increase IRA contributions while you are still employed.
2) Know that at age 59 1/2 there are no more penalties on early withdrawals from retirement accounts. This would be a good time to look at Whole Life Insurance with long-term-care riders so you can have a buffer should you need long-term-care in the future. A hybrid Life insurance policy will allow you to withdraw money when you need and still maintain your police face value.
3) At age 62 you can start receiving Social Security checks, but the amount will be greatly reduced because you did not wait till your full eligibility age. Unless it is necessary, I would not recommend you start drawing distributions from Social Security until you must. At age 65 you are eligible for Medicare benefits and increased distributions as well as having the option to retire or continue to work.
4) If you are going to continue working after 65 and have credible employer health coverage, you need to know that at age 70 you are eligible for full Social Security distributions and must enroll in Medicare.
5) At age 70 1/2 is when you must start taking withdrawals from most investment accounts or be charged tax penalties. This is an ideal time to invest in a lump sum whole life insurance policy or give to local charities and churches.
6) Unlike market-based investments like annuities or stocks. Life insurance is guaranteed and protected. It is smart to be more conservative with your money, so having Life Insurance is a safe bet. Should you run out of money and are on Medicaid, your Life policy is protected from the Medicaid Estate Recovery Program that demands repayment of all monies spent on your care.
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