Last post, we brought up the crucial issue of securing yourself against some of the most common risks for those entering retirement. You’ve done the planning, and your next goal is to safeguard your plan against the possibilities of your funds being depleted. If you’re retirement planning in Irvine or Orange County, you may want to listen up.
Is living longer a risk? It is if you’re living longer than you planned to. Simply designing your retirement plan around the average lifetime expectancy is a start, but statistics point that it may cause problems for the roughly half the population that will live longer than average, and each medical advancement increases the need for planning for the long-term.
Luckily there are a good variety of products that can address retirement planning with longevity in mind. Annuities have a variety of options, such as guaranteed minimum income that works for life. There is even “longevity insurance,” which guarantees an income after a specified age, which may make sense for some retirees. A qualified retirement planner can help you sift through these options to determine what is most suited to your personal situation.
The converse of longevity—serious illness for you or a loved one—is one of the fastest way to have your retirement account decimated. In order to address this very real contingency, a preemptive approach is needed, with emphasis on the long-term. Know your health plan and where the gaps are—what are your plan’s out-of-pocket maximums? Does your plan have any limits on the amount of payouts? What is and isn’t covered under the plan? With the prevalence of long-term care needs, it would be an oversight to not consider how long-term care could benefit you. For many, having that coverage would be their only option to maintain their lifestyle and avoid massive debt or insolvency in the event of a catastrophic illness.
A mercurial topic in the arena of retirement, credit card debt is listed as a major contributor to bankruptcy for retirees. This is likely not because of extravagant spending, but rather from people using credit cards as a last resort in a difficult financial situation. Even if it doesn’t end in bankruptcy, a hefty credit card debt can clamp a ball and chain around your retirement aspirations, and needs to be planned through in order to ensure that it doesn’t start taking its toll on your life quality after retirement.
Every person has a path toward the retirement they aspire to—but we’re all open to risks. Where proper retirement planning comes in is to address and mitigate those risks. If you’re in Irvine and you’ve recognized some risks in your plan that haven’t been addressed, give our team at Miramontes Capital a call. We’d be more than happy to help.