Four Financial Options for Baby Boomers Facing Retirement Costs
Baby boomers, or individuals born between 1946 and 1964, are beginning to reach the age of retirement and therefore considering their next steps, such as housing options and financial agendas. Whether they worked hard to build a savings or not, baby boomers will discover a variety of financial struggles. By planning ahead for retirement, they can handle these financial issues, such as an increased cost of living, increased medical costs, and low returns on investments. As baby boomers are accustomed to living an active and independent lifestyle, planning for their financial stability in the future is going to be essential.
Income and Expenses
The first thing you should do when considering your financial options for retirement costs, is to get a summary of your current income and expenses as well as future expenses and income. If you will have money coming in after retirement, such as from social security, retirement, investments, or a pension plan; get an approximate total and add them to your expected income. Now is the time to go over your current and future expenses in order to determine ways of saving money and starting a retirement budget.
If you are a baby boomer who is still employed and has access to retirement plans as part of your company’s benefit package, enrolling in one or several of these plans is crucial. It is never too late to start putting away money for retirement, and your employer might match your contributions which makes it that much more important. A variety of retirement plans are offered by employers, including 401K as well as other types of plans that can be doubled as a retirement plan such as a health savings account (HSA). Inquire about the various retirement plans available to you to take advantage of this excellent benefit.
Long-Term Care Policies
Affording medical expenses such as doctor visits, prescription medications, medical treatments and other associated health expenses will become even more important during retirement age. Baby boomers have the opportunity to begin preparing for these large expenses before the hit retirement age. Long-term care insurance offers a variety of benefits that supplement other insurance policies. If the baby boomer enrolls in long-term care insurance at an early age, they will save money on the policy as the rates will be lower. Even baby boomers close to retirement age can benefit from obtaining a long-term care policy.
Finally, considering housing options will weigh heavily on the financial options the baby boomer is going to have during retirement. Reducing living and housing costs may be possible which can help the baby boomer to live a more comfortable and care-free lifestyle. For instance, if they currently own a home, selling it in order to rent a smaller home or an apartment in a senior living community is ideal in many instances. Choosing between owning or renting also opens different types of financial options in terms of comparing the two.