7 Common Questions We’re Asked
When Should I Begin Taking Social Security?
This is often the first question, because it’s one that we all have to answer at some point. Simply put, the earlier you take your benefit, the smaller it will be. Waiting longer does increase the benefit amount. It’s tempting to claim early and get an additional income source, but looking at the whole picture - how this money will play out long term - and possibly waiting to file can bring you and your family thousands of extra dollars.
Should I Buy an Annuity?
An annuity is an insurance product that creates a lifetime income stream. For some people who already have guaranteed sources such as Social Security and a pension, this might not be necessary. For others who do not have much in the way of guaranteed income, it may make sense to buy an annuity. This can also help with planning the unknowns of the future by putting an expected dollar amount at regular intervals, however, this decision, like most financial decisions, is one best made as part of an integrated financial plan that weighs risk and benefit.
.
How Long Will My Money Last?
This question often causes the most fear, and it is one we are most passionate about helping with. Although no one can give an absolutely definitive answer, we offer detailed and holisitic planning factoring in life expectancy, assets, taxes, inflation, and more to play out multiple scenarios for you and your future - and find a way to optimize your resources through all of them.
How Much Will I Spend?
This probably depends on whether you intend to travel more, spend more on hobbies, or start a new business in retirement. If you expect to spend less on job-related expenses like clothing, dry cleaning, travel, and vehicles, your cost-of-living may go down. It’s a good idea to look at your current spending and do some digging deep to see what you think is likely to happen in retirement. Don’t forget to factor in health insurance, whether you will continue with your previous employer’s plan, switch to Medicare, or pay mostly out-of-pocket.
Should I Take My Pension as a Lump Sum?
Similarly to social security, there are long-term questions to answer about how your pension will benefit you the most. As tempting as a lump sum payment option is, there can be many advantages to taking payments over a larger period of time. Financial planning can explore what both options would bring you and help determine what fits in best with your overall plan.
How Much Money Do I Need to Retire?
Maybe you’ve been trying out some online calculators and aren’t sure if you like what you see. There are as many answers as there are colorful people and lifestyles. Some folks have been playing the market for years, others worked the same job for decades and set aside a predictable amount every week. Some people outspend regularly and others like the safety of their money in their mattress. We can help estimate where you are now, where you’d like to be in the future, and what changes might need to happen to make that possible.
How Will I Pay for Medical Expenses in Retirement?
Maybe because the rules change slightly every year, Medicare has a reputation for being scary and unknown. In general, you can start getting Medicare health care coverage at age 65, but you should expect it to only cover about 50% of your total expenses. Vision, dental, hearing, co-pays, and other Medicare premiums are all things to keep in mind.
Long term care insurance is another tool some people utilize for their medical care plan in retirement. A rule of thumb to start the conversation is looking to have about $5,000-$10,000 per person, per year, covered in some way for your retirement.