There are plenty of reasons to rejoice about retirement - more time to spend with your family, the ability to travel more and the opportunity to pursue your true passions. And today’s retirees can also appreciate the fact that on average, people continue to outlive previous generations.
Most people enjoy retirement even more than they expect. A recent study by The Hartford and the MIT AgeLab confirmed that 64 percent of people less than 10 years away from retirement said they expected to feel happier in retirement. And when those who were already retired were surveyed, 77 percent said they were happier in retirement than they were when they were working.
But that doesn’t mean retirement comes without its challenges. Through his research on the topic, Dr. Robert Pokorski, chief medical strategist for The Hartford’s individual life insurance business, has identified the four most common nonfinancial challenges that most retirees face:
• Climbing health-care costs. Health problems are more common during retirement, and the associated costs are often much higher than expected.
• Widowhood. It’s not pleasant to imagine life after the death of your spouse but three in four married people are widowed for five years or more.
• Needing long-term care for a chronic illness. Many retirees don’t plan on the need for chronic care but three in five men and four in five women will need care later in life.
• Outliving your retirement savings. More people are living to age 90 and beyond, and that’s a good thing. However, this also means more folks have to stretch their retirement savings over a longer period of time.
Addressing these challenges
Given these many challenges, most people find it difficult to save enough to guarantee financial security during retirement. Fortunately, there are new options that address these common issues.
Medicare supplement insurance can help address the challenges of rising health-care costs. Medicare supplement insurance pays for some health care not covered by Medicare, according to Pokorski.
Ways to address the other challenges Pokorski identified are available through new life insurance and annuity products that provide greater financial flexibility to help meet changing financial needs as people age. There are life insurance policies on the market that can provide funds for chronic care needs or be tapped as a source of cash during retirement. Any lifetime benefits taken from these products during life will reduce the remaining death benefit available to the policy’s beneficiaries. Annuities can be a source of guaranteed income that can last as long as the retiree lives.
Everyone has different financial planning needs and goals, Pokorski points out, so it makes sense to consult a professional financial advisor about your financial needs as you age. While you can’t predict exactly what challenges you may face in retirement, you can prepare for common issues and protect your finances by building as much flexibility into your financial planning as possible, he said.
As with all matters of a tax or legal nature, you should consult tax or legal counsel for advice.
At the Prime Time Fair, you can visit the booths of Boddy Insurance and the Ledbetter Law Firm for information.