Blindly putting money aside will not optimize your retirement savings. Make sure you understand your position in relation to these four overlooked costs.
Most of us began building our retirement savings since the moment we started to work. So why is it that many Americans find themselves over their heads in bills after retirement, realizing that they may not have planned properly for their future? We want to be living carefree on a beach somewhere in our retirement, not meeting with financial advisors, calling out to family members for help, or taking out loans late in our lives.
We all know we need to save for retirement, but we often don’t know exactly what we’re planning for. Blindly putting money aside will not optimize our retirement. By understanding the top overlooked retirement costs, we can begin to put into place concrete game plans given certain situations prevail. Understanding our particular situation in relation to these costs can help us ballpark and reassess our savings goals.(Also, see: 5 Myths That Could Hurt Your Retirement.)
More and more Americans are becoming aware of the rising cost of healthcare in retirement. Yet, the majority of us are still shocked to find that the average couple over the age of 65 can expect to pay about $245,000 in healthcare costs alone through retirement, according to Fidelity’s annual Retirement Health Care Cost Estimate. Due to medical advances, we’re fortunately living longer; nevertheless, as we age, we become more prone to health complications. Gaps in Medicare coverage, along with high deductibles and other out-of-pocket expenses can inflate uncovered medical expenses and put a significant dent into hard-earned retirement savings. (For related reading, see: How To Make Sure Your Healthcare Costs Do Not Ruin Your Retirement.)
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