Housing In Retirement
Make planning for your future housing needs one of your first priorities since where you live in retirement affects not only your income, but also your emotional, social, and physical well being. It is an important part of your overall retirement strategy. While the cost of owning a home hasn't gone up as much as health care, it is high in many regions. Home heating and cooling costs are rising fast too. Maintenance, condo fees, real estate taxes, and insurance are other costs affected by inflation. Don P. Baker Financial Group can help you find a new home.
As you age, you may want to look into other types of housing. Independent living facilities, designed for reasonably healthy older people, often require a hefty down- payment, say $120,000, and then a monthly fee of up to $2,000. Saving for nursing home care, which in 2008 averaged $212 a day, also might make you feel more financially secure, given that at least 40 percent of today's 65-year-old Americans will spend some time in the future in a nursing home. Don P. Baker Financial Group can help you Long Term Care issues.
With medical and housing costs such a big part of a retirement budget, it's no surprise that products and services have been developed to help plan for and manage these costs. Rising health care costs, in particular, could consume all the money saved for retirement. One of the more recent products developed is long-term care insurance, which can protect retirees' assets by paying for medical care in a nursing home and sometimes in your own home. Premiums vary by the features you choose, such as the amount of the daily benefit paid and protection against inflation. The average premiums for a 60-year old are about $2,300. Buying such a policy at a later age means higher premiums. If you're considering a policy, get some advice, because long-term care insurance is a new product and some policyholders may find the coverage isn't what they need.
To cope with these future expenses, some pre-retirees are starting special health care savings funds at work, separate from their retirement savings. One example is a type of account, a health savings account (HSA), which is designed to help certain employees save for future qualified medical and retiree health expenses on a tax-free basis. Essentially, an HSA is a savings account into which you can deposit money for future use. If you belong to a health plan with a deductible of at least $1,200 (for individual coverage) or $2,400 (for family coverage), you may be able to set up an HSA. Individuals who don’t belong to a workplace health plan can sign up for HSAs with some banks, insurance companies, and other approved entities.
These accounts can receive contributions from you, your employer, or even a family member on your behalf. You can use the funds from an HSA to help offset future medical costs, and the money in your account can be carried over from year to year. In addition, this type of account is portable; it stays with you as you move from one employer to another or if you leave the work force. Don P. Baker Financial Group can help you with this decision.