Everyone dreams of the life of leisure they plan to enjoy when they reach retirement, but there are some retirement costs and considerations one Deerfield financial advisor believes are important for you to be very aware of if you plan on having enough in your retirement fund to last a lifetime.
– Increased medical costs. Medicare is a major part of most retiree’s budgetary allowance, but don’t forget that Medicare also has copayments, costs and deductibles. This includes the premiums: according to a Kaiser Family Foundation report, the national average premium increased 13% between 2007 and 2010.
– Increased taxes. In some cases you could see an increase in taxes. For example, if you paid off the mortgage to your house, you won’t receive that deduction on your taxes. Taxes also fluctuate over time, so you want to save as much as possible in the scenario that you pay more after you retire that you originally planned.
– Medicare enrollment isn’t a given. Unless you already receive your Social Security checks when you hit 65, you are not automatically enrolled. You will have to set that up with a Social Security office near you.
– Plan around your required minimum distributions (RMDs).After 70 ½, the IRS expects that you take out a required sum of money from your retirement savings, or pay a large fine for not doing so. If you have a large balance in your IRA, your RMDs could put you in a higher tax bracket. Withdrawing sooner combined with a lowered income could ease your financial burden.
Make sure you discuss your long-term plans with your financial advisor. If you do not have one, Mooney Lyons can help. Visit us at mooneylyons.com. We can analyze the needs you have now and anticipate those you’ll need in the future, giving you a sound financial plan to retire in confidence.