Planning for a retirement that is still far in the future is overwhelming for many people so many avoid it for as long as possible. But, as people live longer and healthier lives, and as corporate pensions and government programs continue to change, early retirement planning is more important than ever before. A critical part of that planning is understanding and estimating your future healthcare costs.
Consider this: the share of after-tax income that the typical older married couple devotes to healthcare will increase from 16% in 2000 to 35% in 2030, and that excludes costs for long-term care.1 Here are some questions to ask yourself as you begin to consider retirement:
Do you know at what age you will be able to afford to retire?
Do you know how much you will need to fund your retirement years?
With people living an average of 20 or 30 years after the age of retirement, the earlier you begin planning the better.
Check the Number
If you are below your target, you may be able to adjust the number by boosting your savings, delaying retirement, continuing part-time work, or trimming back your lifestyle.
Don't Put it Off
Wachovia can help you get started.
With tools such as our Retirement Fitness Quiz, Retirement Readiness Assessment, and Retirement Planning Calculator, you can see how close you are to hitting your target.
How Does Planning Begin?
Start Early.
Keep one eye on today, and the other on tomorrow. Even as you finance your children's education and pay your bills, start planning to set aside a certain amount towards retirement. Remember, while your children may be able to take out loans to finance their education, there are no such loans for retirement.
Take a Financial Snapshot
Add up everything you spend, from your grocery bills to your insurance premiums to calculate your current cost of living.
Look Ahead
Your travel costs may increase after retirement, but housing and clothing costs may go down. Estimate future costs as specifically as possible, and don't forget to factor in inflation.
Go Long
At age 65, your life expectancy is an average of 83, according to government statistics2. And keep in mind, you may beat the averages.
Do the Math
Figure out what you've got, estimate future savings, and calculate conservatively how your savings might grow. Don't forget to add in future income such as pensions and Social Security.
For more articles on retirement planning, visit the Wachovia eNewsletter archives.
To learn more about how Wachovia can help you find your retirement number, contact our Retirement Resource Center, (888) 840-2517, 8:00am - 6:00pm ET, Monday through Friday.
