While you never know your needs as you age, the first step is thinking about your financial situation and health today so you can plan for your later years. With a one in four chance of making it to our 90th birthday, being independent and thriving as we age is something to pursue. Here are some things you may want to consider as you plan for your later years:
Stay socially connected to others. According to the National Institute on Aging, research has shown that older adults with an active lifestyle are less likely to develop certain diseases. Participating in hobbies and other social activities may lower the risk of developing health problems, including dementia, heart disease, stroke, and some types of cancer. Adults that continue to be socially active also have a longer lifespan.
Save for retirement and other goals. Consistently saving for your financial goals and retirement by implementing appropriate strategies can help your financial situation when you retire. Critical steps will help determine if you can retire on your timeline and have enough retirement savings to last your lifetime. Retirement savings benchmarks and a comprehensive plan with the help of your financial professional are the first steps toward knowing if you're on track to pursuing your goals.
Maintain a healthy lifestyle. Good health as one ages must start long before retirement. Those enjoying good health in retirement have taken steps along the way; good nutrition, exercise, no smoking or excessive alcohol use, maintaining a healthy weight and monitoring their health with yearly checkups. Maintaining a healthy lifestyle may help ensure your assets will not prematurely liquidate for health-related care and expenses that could have been avoided.
Plan for future care. With the cost of care increasing year over year, considering how the cost of care if you need it, will impact you financially is important. As you age, you may need help with the following:
- Personal care
- Household chores
- Getting around/transportation
During financial planning, your financial professional can help you determine the impact of self-funding the cost of care at 100% versus purchasing long-term care (LTC) insurance. The LTC policy may cover some home based services. Your financial professional can help you understand LTC policies and riders, how much they cost, and when the policy starts to pay for care after a set waiting period.
Being ready to retire on your terms. Having the ability to decide when you want to retire from your profession and being financially prepared will help you determine what is best for your situation. Being ready comes from achieving all you want in your career and looking forward to the next chapter of your life. Preparing to retire on your terms starts with a plan, then working toward your goals.
Money management. Managing your money and following a budget can help you feel financially secure today and may reduce the risk of running out of money in retirement. It's important to follow your unique financial plan, revise it as you age, and start spending down your retirement assets. Managing your money may also include a strategy to offset inflation risk as you age.
Aging in place. On a broader definition, aging in place means living independently in a home that is right for your needs. Aging in place can mean downsizing to a smaller home, living in an assisted or LTC facility, living near or with family members or having professional care at home. It's important to develop a plan and share it with your family so that when the time comes, they know what you prefer.
If you're still working and nearing retirement, planning the subsequent decades of your life is crucial. It starts with a healthy mindset, body, and financial wellness.