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Understanding The Economics of Aging

You go to a doctor when you want a physical exam, but what do you do when your finances need a check-up? The truth is, neglecting your financial health in your retirement years can negatively impact your quality of life as much as a chronic illness. You may have planned for travel, for developing new interests, for simplifying your lifestyle, downsizing, or even passing assets on to your relatives, but have you planned for your own financial needs during your golden years? The time for you to evaluate your fiscal fitness is now.

The Economics of Aging

You might have planned for retiring in your sixties, but with advances in medicine and healthcare, you could find yourself living to your eighties and beyond. Did your retirement plan include the possibility of up to thirty years or more of retirement? Some people are living longer in retirement than they did in their working lives, so having a long term plan that offers flexibility and even the potential for modest growth is crucial to maintaining an excellent quality of life. You have to strategize for your retirement years and perhaps even adjust your initial goals by working longer, evaluating and possibly reducing your expenses, and understanding your Social Security benefits. By considering more than just your assets and expenses, your overall retirement portfolio can be developed to maintain an excellent quality of life as well as quality of care when the need arises.

The most critical thing you can do when planning for retirement is to realize that Social Security and Medicare are not designed to provide for your retirement. They are merely a piece of your overall retirement plan, and not a major piece at that. You need to be aware that the potential of long term care needs will most likely grow faster than you initially realized or planned for. You might even be supplementing an older parent’s financial needs as your own parents or family members outlive their retirement funds. The expenses of long term care needs, whether in-home care, assisted living care, or skilled nursing care, are all expenditures that will diminish your retirement savings faster and more catastrophically than any travel or moves you may have anticipated.
The key to handling these expenses is to be prepared for them. Most everyone is going to develop health conditions as they age, and the need for supplemental health coverage to aid in the resulting costs is imperative. Likewise, the idea that you will be able to care for yourself indefinitely is also not realistic. At some point, we will all need extra assistance with activities of daily living or more, and that assistance comes with a hefty price tag.

What can you do to minimize the stressors of the economics of aging? A financial plan is essential. Seek out a professional financial advisor, preferably one that specializes in retirement or elderly finances. Don’t leave that plan up to your well -meaning family members. A financial advisor can help you realize the real costs of retirement, the good and the not so good, so that you are prepared for whatever your future may hold. Another good source for planning is contacting a good elder law attorney. Seeking legal advice from a professional who specializes in issues for the elderly will offer you the security you want to safeguard those plans you worked so hard to create. Don’t forget about another knowledgeable resource, the geriatric care manager. These professionals are often the best source of guidance on a multitude of issues that affect your retirement years, including the financial piece. Geriatric care managers will provide an overall assessment to determine all of your needs and help you create a plan of action to meet those needs.

You spent your life saving and planning for retirement, so don’t let that plan fail you. Be aware. Be realistic. Seek expert advice. The more you minimize the stress of your financial situation, the more you can truly enjoy your retirement. Remember that you saved for a reason-to provide for yourself-so don’t be afraid to use your assets for your own care. It is your retirement nest egg, and you get to decide how to spend it. Don’t let your legacy to your family be a financial disaster. Being prepared now will make the retirement transition easier for everyone but especially you.
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