3 Ways to Prepare for Financial Success Now and in Retirement

2020 was quite the year, to say the least, and I think most of us are ready to put our best foot forward and start 2021 out on a strong note. From retirees to pre-retirees, young families and business owners, many have felt some sort of financial stress from the pandemic. Luckily, the New Year offers everyone a fresh start and is the perfect time to get your financial house in order to reduce stress going forward. 

Here are 3 smart money moves to get your financial house in order, reduce stress, and prepare for your best year yet as you approach retirement:  

1. Start income planning: 

Income planning is the foundation of a strong retirement plan. This process is designed to help you identify when, from where, and how much income you will pool from each of your resources in retirement.  

It isn’t as easy as it sounds. Many retirees struggle to piece this puzzle together. And who can blame them? There are so many questions to be answered, like: 

  • Which withdrawal will trigger a major tax event
  •  Which resources should remain invested longer? 
  • When should I claim social security benefits? 
  • Is my portfolio looking too risky or too conservative? 

While many of us are familiar with saving for retirement, we aren’t as sure about how to spend the funds we have saved. It is important to realize that creating income for retirement requires an objective look at your strategies to avoid outliving your money or living a diminished lifestyle.  

The value in income planning is in devising a drawdown plan that identifies any gaps that may need to be filled before your saving years have ended.  

2. Solidify a health insurance plan: 

Health-related expenses are among the highest spending categories for retireesi; unfortunately, they are also the services that tend to reflect the most inflated prices for the elderly over time.ii In fact, the change in the Consumer Price Index (CPI) for medical care between 1979 and 2019 rose 638.6%.iii 

Because of the high cost of healthcare related expenses and the potential increase in need for healthcare services as we age, the last thing a retiree wants is to be underinsured. The two most important things to consider here, then, are time and gaps.  

  • When will you current benefits run out? For many, it will be when they leave the workforce and no longer receive employer benefits. 
  • When will you begin taking Medicare?  
  • What Medicare covers and doesn’t cover? 
  • How will you fill in the gaps Medicare leaves behind?  

The timeline will be critical in identifying your most cost-effective move. But, you’ll want to review your policies with a financial services professional to confirm you aren’t underinsured, as well. 

3. Put a Long-Term care plan in place: 

Did you know that 7 out of 10 people require long-term care at some point in their lifetime?iv And the monthly median cost for assisted living per month is around $4,500 per month? Of course, the cost of care varies by state and depends on the level of care needed (in-home, at a facility, at a facility with a private room, etc.), but can quickly add up. 

Many retirees are also surprised to learn that Medicare does NOT cover most long-term care services. The result is often that the care or fiscal responsibility falls on that of other family members, which has been seen to cause undue heartache and hardship for all parties involved.  

There are a number of ways to pay for care including purchasing long-term care insurance or adding a long-term care rider to your existing life or health insurance policies. You can also choose to self-fund by investing and setting aside assets specifically for this event. Annuities are another option that some investors explore.  

Protecting your future.  

Income and healthcare planning are an essential to a successful retirement chapter. They allow you and your advisor to make sure all your bases are covered so you can choose whether you want to travel the globe or play seaside with grandkids, volunteer abroad or tee off with friends. Whatever your retirement goals, your potential for success starts here and now with the right plan.  

Don’t know where to get started? URS Advisory is here to help. There is no better way to kick off 2021 than with a fresh plan!  

If you’d like to learn more about our comprehensive retirement planning services, we invite you to schedule a complimentary conversation with us. We would love to get to know you and see if URS Advisory would be a good fit. 

Disclaimer: Advisory services are offered through URS Advisory LLC, a Registered Investment Advisor in the State of Florida. Insurance products and services are offered through URS Insurance, an affiliated company. URS Advisory LLC and URS Insurance are not affiliated with or endorsed by the Social Security Administration or any government agency. Investing involves risk including the potential for loss, and past performance is no indication of future results. Opinions expressed herein are solely those of URS Advisory. All written content is for information purposes only. It is not intended to provide any tax or legal advice or provide the basis for any financial decisions. Material presented is believed to be from reliable sources; however, we make no representations as to its accuracy or completeness. All information and ideas should be discussed in detail with your financial adviser or qualified professional before making any financial decisions.