According to Boomer Expectations for Retirement (BER), current retirees might not be where they think they are in their retirement planning. Make sure you aren’t falling victim to these retirement savings sins.
Not Saving Enough
This may be the most obvious — and the most frightening — but it bears repeating. According to the BER, an astounding 23% of baby boomers have no retirement savings.
Draining Retirement Savings
We know life happens and there are unpredictable events that occur throughout your life. However, you should be very careful about dipping into your retirement savings. About 17% of new seniors save for retirement once but then spend the money. This happens either due to desperation or carelessness. Worse yet, it can be both.
Not Properly Calculating a Retirement Savings Goal
Not having a retirement savings goal makes it harder to save enough for retirement. Think about it; if you haven’t set a goal, how will you know how much you want to save? On average, only 25% of boomers have tried to run the numbers without a financial advisor. And of those with a financial advisor, only another 25% have set a monetary goal.
Underestimating Healthcare Costs
According to studies, a healthy couple in their mid-60s may need a budget between $300k-500k for their health care expenses. This includes insurance, copays, and other out-of-pocket expenses. Yet, most retirees are unaware of just how much healthcare can cost. According to the BER, less than 20% of boomers believe their healthcare costs will come to less than 20% of their retirement income. Additionally, more than 25% think it will be less than 10% of their retirement income.
Ignoring Long-Term Care Costs
This one is particularly dangerous, yet nearly 70% of boomers are going to need some form of long-term care. What’s more, is the average cost is roughly $90k a year. And if you are banking on Medicare to pay, think again. Medicare doesn’t pay for long-term care.
Mishandling the Retirement Date
Did you know that postponing retirement can have some major benefits? Some 29% of individuals aged 62 to 66 have decided to postpone their retirement. Additionally, an astonishing 33% of those aged 67 to 72 have done the same. However, others overestimate how long they’ll be able to work. About 31% of boomers believe they will be able to work past 70. Unfortunately, the BER tells us that fewer than 10% actually can.
Not Getting Affairs in Order
Roughly two-thirds of boomers have taken no steps in protecting themselves should they suffer a major health event or need memory care. They haven’t sat down and shared their wishes with their family. Unfortunately, many people who have been through the process of unplanned life events can tell you, the chances of you waiting too long are pretty high if you don’t start planning today.
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Twin Lakes is a continuing care retirement community in Cincinnati, Ohio, offering villa homes, apartments, rehab services and more. We’re focused on supporting the vibrant and active lifestyles of our residents so they can age well. For more information, contact Twin Lakes online or at 513-247-1300.