Retirement is supposed to be exciting and the conclusion to your working career, however, it can also lead to some fears if you are not appropriately prepared. A new TransAmerica study indicates that American workers are dealing with fears about health and financial security in retirement.
As you might expect, healthcare and longevity both factor heavily into anxiety over the retirement process.
The most common fears that showed up in the survey of retirees included:
- Up to 51% of American workers are concerned about outliving their investments and their savings.
- Current employees are concerned their social security will be eliminated or minimized in the future.
- Long term care expenses are on the rise and Americans are concerned about paying for it.
- Cognitive decline is an issue that is currently worried about by 35% of workers.
- Lack of affordable and adequate health care since Medicare only goes so far and the costs not covered by Medicare can be catastrophic. This is why 32% of the survey respondents listed this as a major retirement fear.
Planning ahead can give you much more peace of mind and confidence about how you approach your individual retirement. It’s important to state necessary planning steps now to feel confident about how you approach the prospect of estate planning. Look ahead to a more confident future for both you and your loved ones by thinking about retirement and estate planning together. Scheduling a consultation today with an experienced estate planning lawyer is helpful.
A recent study found that retirees are spending more than one-third of total Social Security benefits on out of pocket medical expenses in 2014. Even when considering other sources of income for retirees, medical spending took at least an 18% chunk of seniors’ retirement income.
A typical retiree can expect to outlay $4,274 each year on medical costs, not including those associated with long term care. Insurance premiums alone, according to the research published by the Center for Retirement Research at Boston College, made up two-thirds of that total because the premiums are extremely high.
Medical costs for Medicare beneficiaries are important to consider for anyone nearing retirement, since those expenses are expected to grow faster than increases in Social Security benefits beyond 2018.
Meaning that retirees have to put a growing portion of their social security income towards medical care. The primary take away from this research study is that even for those individuals who live on their own and did not use long term care, the expenses associated with medical out of pocket costs are extremely high and a large portion of their income and those spending numbers are only anticipated to grow in the future.
If you have questions about how to best protect the assets you have worked so hard to accumulate over the course of your life, and how to pass them on by minimizing taxes and ensuring a smooth transition, consulting with an experienced estate planning attorney in Massachusetts should be your next step.
Older adults who are concerned about protecting their cognitive functions and benefiting from social interaction could consider volunteering as one boost. A University of Missouri researcher found that although the associations with physical health and volunteering have long been documented, less has been known about the connections with mental function.
However, a professor in the Department of Human Development and Family Science found that there is link between volunteering and higher levels of cognitive functioning in older adults.
Working memory and processing are all essential for living an independent life and these are the methods with which the brain uses to process information. The processing capacity and brain working memory benefit significantly from volunteering. Processing refers to how fast a person’s mind is able to take in and store information.
Working memory, distinct from long term memory, is what the brain requires to temporarily manage and store information. Data from the Health and Retirement Study, which has been collected over the past quarter of the century were used to identify these results and they found that looking at results for more than 11,000 adults aged 51 and over.
There were significant connections between volunteering and cognitive function, regardless of the amount of time the person spent volunteering. Volunteering can be a great way to supplement your future as an older adult. Consulting with a knowledgeable estate planning attorney can also be helpful. Schedule a meeting with a Massachusetts estate planning lawyer today.
Lack of access to retirement programs, inertia and short-term thinking are just a couple of the challenges facing Americans as it relates to retirement planning. Study shows that plenty of people are living longer and retiring later than ever before. But far too many of those individuals affected by these statistics are not appropriately planning for retirement.
Individuals who fail to save for retirement frequently have no access to an employer-managed retirement program and have no idea how much money they need to save. Other individuals who have failed to take the necessary steps with regard to their retirement feel that they don’t have the right financial awareness to make these investment decisions and working longer seems to be their default retirement strategy as a result.
Natural behavioral factors of humans and a combination with short term horizons, lack of access to retirement savings plans from employers, and limited financial knowledge, all work against people who ultimately want to retire and understand what they need. Strategic behavioral nudges, such as:
- Automatic retirement contributions
- Expanding employer based savings
- Further financial education,
can all help an individual who is thinking about the benefits of retirement planning to actually articulate these and ensure that their needs are considered carefully. There are so many different things to consider as you approach retirement, not the least of which is the intersection between retirement planning and estate planning. Having an attorney who can guide you through these complicated aspects of your life is extremely important.
It is already a well-established fact that women tend to live longer than men and this has important ramifications from the perspective of planning for a successful future and a long and healthy retirement. New studies show that women can benefit from staying in the workforce for longer to help make up for some of the challenges affecting their ability to save enough money.
A year of no earnings can cause your benefits to drop significantly from the perspective of social security. A recent study conducted by the Boston College Center for Retirement Research found that women are three times as likely as men to have at least one year in which they earn no money. Women typically tend to earn lower wages as well, meaning that women have a powerful reason to postpone their retirement and their Social Security claims and consider the benefits of working longer.
Stepping out of the workforce while waiting to get closer to retirement age can make this problem more serious since the peak earning years for people of all genders are usually clustered towards the end of careers.
It can also be challenging to find a comparable job as you get closer to retirement age because many employers will still to prefer to invest the time and training in employees that are likely to stay for a longer period of time.
This unique set of challenges presents women with an opportunity to take control of their retirement and estate planning by prolonging leaving the workforce for a few years at minimum. Scheduling a consultation with an experienced Massachusetts estate planning attorney is extremely important for protecting your interests.
Parents may have numerous challenges as they shift into senior citizen years. However, a new study by the Center for Retirement Research at Boston College, determined that children can be a detriment to saving enough for retirement. Children are expensive because they require clothing, food, child care, and education.
The overall family income can be negatively affected by one parent, in particular, taking a lesser job or staying at home. This means less of a chance that that parent will be able to set aside money for retirement. Within a family, every child is associated with up to 4% less wealth. If the parents are in their 50s, each child increases by 2 percentage points the parent’s risk for not having enough support financially to get through retirement.
It’s estimated that nationally approximately 50% of couples do not have enough assets like a pension payment, retirement plans, or a house that is completely paid to sustain them through a full retirement, which could last as many as 30 years given recent longevity numbers. With this information, you need to be prepared to protect yourself and consider all of your financial obligation as you near retirement.
Retirement and estate planning are well worth the time and effort put in to ensure you’ve got something that reflects your needs and goals. Engage the services of professionals to get peace of mind with your planning.
Anyone who is thinking ahead to retirement has probably invested a significant amount of time into their career as well as planning ahead for what their retirement will look like. Having consultations with a broad range of different professionals can help you to articulate your goals and ensure that your current plan is in line with your needs. Two of the major issues that affect the employees in their 50s and 60s include job satisfaction and work life balance.
At the recent 2017 Retirement Research Consortium Meeting, new studies were shared regarding a perspective on both of these issues. Researchers in a California study found a strong connection between women stepping out of the workforce when their spouse had a health shock.
The same desire to leave the workforce occurred whether the woman was employed on a part time or full time basis. In fact, up to 14% of people who retired earlier than planned said that their reason for doing so was having to care for a family member such as a spouse.
When a spouse gets sick, this often causes a reprioritization and indicates that life may be interfering with work. According to the research study however, men were unlikely to follow the same pattern as their wives when the women had health shocks.
The study shows that women bear a lot of the responsibility when life intervenes around retirement. If you have questions about how to connect your retirement planning and your estate planning, scheduling a consultation with an experienced professional is strongly recommended.
An estate planning attorney in Massachusetts can help illuminate you about some of the most critical issues to pay attention to during this vital time.
Many people looking to retirement don’t want to suddenly stop working altogether either for financial or personal reasons. They instead want to phase into it by switching to part-time hours first. However, there’s a gap between what employees want and what employers expect.
The Transamerica Center for Retirement Studies recently identified that 77% of employers believe that the majority of their employees will want to continue working after they retire. However, up to 47% of employees envision a phased transition to retirement. Very few of them actually end up phasing into retirement. Many employers do not want to allow their employees to shift from full-time to part-time.
Just 27% of employers allow workers to take on positions that are less demanding or stressful so that they can prepare for retirement. These phased retirement programs are rare even though there is clearly interest in the market coming from employees directly. More than 1,800 for profit company employers were interviewed for this study. Although 71% of those employers believe that they were aging friendly with regard to work arrangements, opportunities, and training for all ages to be successful, many of them do not provide a comprehensive or clear program for phasing into retirement.
The US Government Accountability Office recently completed their own study for the US Senate Special Committee on Aging. They’ve identified that phased retirement programs offer a great deal of flexibility for employers and workers, but that they are extremely rare. If you have questions about the retirement planning process and how it works alongside estate planning, schedule a consultation with an experienced estate planning lawyer today.
Millions of baby boomers are headed into retirement and unfortunately, some may discover that they are not as prepared as they thought they were. Thinking about retirement is a great opportunity to evaluate mistakes you have made up to this point or to avoid them in practice altogether.
The first and most common mistake with regard to retirement planning is failing to get an early jump on planning. The earlier you start saving for retirement, the easier it is to accumulate the necessary resources. Young individuals who are settling into a career, purchasing their first home, and getting married will frequently defer retirement planning, which could cost them in the long run. The next major mistake in retirement planning is underestimating your retirement needs.
Most people don’t realize how much money they will actually need to acquire in order to retire comfortably. A person will usually need to replace close to 90% of his or her income before retirement to maintain a standard of living and as longevity numbers are increasing, this becomes even higher. Furthermore, many people overestimate their ability to continue working past a certain age. People with desk jobs are most likely to assume they can continue working, but this is often not the case. Reasons outside of their control such as poor mental or physical health, losing their job or having to care for an ailing spouse or a loved one are just a couple of the reasons why you may need to stop working sooner than you anticipated.
Want more information about retirement and estate planning? Make a call to a Massachusetts estate planning lawyer today.
After you’ve been working your entire adult life, when a company presents you with an early retirement offer, it seems wise to take it. It can even be tempting if you’ve been planning to get out of the job for some time. But you should never accept an offer without first carefully reviewing your options.
Many people dream of early retirement, but the decision to take it can be a complicated one. There are both emotional and financial considerations to evaluate. There is a psychological impact of early retirement. If you are not fully prepared to transition from your full-time job to a more leisurely schedule, the adjustment can be challenging. You can even face more health issues as a result.
Experiencing mental health problems like anxiety is extremely common for someone who has not planned for the transition from working to early retirement. This is why it’s beneficial to determine whether or not you are psychologically ready to make the jump from your job to being retired sooner than you anticipated. Breakdown the offer that you were given by your company to determine whether or not it is worthwhile to retire early. The offer should include a breakdown of this important information and you are in particular interested in any post-retirement medical insurance and a severance package.
Compare the severance package provided by the company to the earnings you would make if you stayed employed. Since Medicare coverage does not begin until you turn 65, you will need to have health care insurance that will protect you from your early retirement until your 65th birthday.
Ready to talk options? Then it’s time to call a Massachusetts estate planning lawyer to discuss more about your retirement and your estate.