Ideally, retirement planning should begin in your 20s—the age when you are just at the start of building your career. As we pointed out in our post entitled, Financial Management Tips for the Millennial Caregivers, the younger generations ought to look as far ahead as they possibly can. As soon as you start receiving paychecks, you should dedicate a portion of your salary to your retirement savings. This way you get into the habit of planning and saving early.
However, the truth is that many individuals are not able to do so. In fact, individuals approaching retirement still find themselves underprepared for any of the costs. In a survey conducted by the Associated Press-NORC Center for Public Affairs Research, one-third of their respondents age 40 and older have not done any kind of planning for their own long-term care needs. Moreover, nearly four out of ten of them mistakenly believe that Medicare will cover their care needs.
What makes matters more challenging for most individuals is that lifespans are getting longer. Yes, this certainly has its benefits—more time to spend with the family and to pursue other passions. However, it can take a disastrous turn when none of the health conditions associated with old age were planned for.
A successful retirement requires a great deal of planning, whether we accept it or not. This brings us to an important question about retirement planning: Where do I start?
The picture painted by many individuals of the so-called golden years often involves traveling on cruise ships and sipping fruity cocktails. Yes, taking the time to travel during retirement is a wonderful goal and it is very much possible and deserved. However, no one can travel every day because we all know that it is expensive.
People planning for retirement can make a list of how they wish to spend their time—travel, volunteer, pursue a hobby and turn it into a business. Beginning a retirement plan must start with a goal—a realistic one.
This also applies to a person’s finances. Set a realistic amount which you will regularly set aside for retirement. As salaries and other incomes rise, then the amount being saved one a regular basis should also increase.
Now, let’s address one retirement challenge that is leaving everyone at a loss. Long term care is a hot topic among retirees because of the prices attached to its services. According to Genworth’s Cost of Care Survey for 2016, the average cost of staying in a private room at a nursing home for a year is $92, 378. This could increase immensely in the coming years. And as retirement seems to last longer than anticipated, there is no telling how much the prices will be then.
Not many people realize this but long term care needs may just be around the corner. 70% of individuals turning 65 can expect to need long term care services in the following years. Without forward thinking and enough time to consider the essentials for long term care planning, many individuals would end up facing the devastating consequences.
It is important to remember to be very thorough when it comes to planning and securing coverage for long term care. Do not make the mistake of diving into the first quotation presented.