When preparing for retirement, there’s a long list of tasks, some of which can be accidentally overlooked. A Kiplinger article, Five Overlooked Factors When Planning for Retirement, highlights some of the things you shouldn’t forget. Contact our Wausau WI retirement team today to learn more.
Taxes After A Move
Whether it’s a desire to live in a warmer climate or to be closer to family, moving after retirement is common. But too often people get caught up in the excitement of selling their current home and finding a new one and forget to consider the tax implications that come with moving.
For example, will you be moving from a state with a low-income tax to one with a higher income tax? Or does your current home state not tax Social Security while your new one will? Be sure to address the pros and cons of a possible move with your financial services professional.
The Cost Of Inflation
Inflation is another commonly overlooked retirement planning factor. While inflation has cooled significantly since the height of the pandemic and the subsequent months, many can easily recall the pinch that increased prices put on the family budget. As you look ahead to retirement, it may be wise to plan robustly for higher inflation.
For example, if you want to maintain your current lifestyle of $5,000 a month in retirement, and we assume an annual inflation rate of 3%, you should budget for about $11,700 a month in the year 2052.
Future Healthcare Costs
The costs that come with both healthcare and long-term care are another element that some people planning for retirement overlook. A 2023 Fidelity study determined that the average retired couple who is 65 will need in the ballpark of $315,000 to address their healthcare needs during retirement. And while it’s not fun to imagine this scenario, the truth is there’s a decent chance that one spouse will need to eventually live in a long-term care facility.
And get ready to have your eyes pop out because a 2023 Genworth study found that a private nursing home room currently costs about $315 a day, or just more than $9,500 a month.
Supporting Others
The need to continue supporting family members is yet another factor that some people planning for retirement fail to consider. As life expectancies increase, many adults currently near retirement age find themselves in the sandwich generation. This is the generation that’s providing their elderly parents with financial and day-to-day living support while also providing some level of support to a child.
A study by the Pew Research Center found that more than half of Americans currently in their 40s are members of the sandwich generation. Meanwhile, 36% of those in their 50s and 27% of those in their 30s are in the sandwich generation.
The Fun Stuff
Let’s end on something upbeat. Many retirement planners forget to prepare for the fun stuff. Sure, your retirement must address things like housing, food, and utilities but let’s not forget that retirement is your reward for decades of hard work and financial discipline — so enjoy it!
Include money for travel, hobbies, and time with family and friends in your budget. By doing so you can enjoy yourself in a way that doesn’t imperil your ability to pay for necessities.