Most older adults’ income decline after they leave the workforce. The first step to ensuring that there are enough funds to last the rest of you or your loved one’s life is review all income sources to determine how much each will provide and for how long.
When You sit Down to Assess Your Retirement Income
Make a list to include:
- Retirement savings such as an IRA or 401(k)
- Other savings accounts
- Real estate (rental property)
- Employment or other income. Consider if you’ll continue to work, perhaps part-time
- Long term care insurance
- At some point, you or your loved one may need assistance with basic activities of daily living, or ADLs like bathing or dressing. For some, a health issue may necessitate additional care. Consider acquiring a long term care insurance policy as early as possible to avoid using all your savings for care. Long term care insurance will also protect your loved ones from assuming all the financial burden that comes from caregiving.
- Social Security and associated benefits
- Social Security provides steady income throughout one’s retirement.
Aside from working for at least 10 years, there are a few other ways to that one can qualify. It’s worth looking into these options, including Social Security Entitlement Requirements and Survivors Benefits.
8 Resources You Should Consider When Planning for Retirement?
If you find you or your loved one’s current financial portfolio isn’t as robust as you think it needs to be, there are financial assistance programs available to achieve a greater degree of financial security. For example:
Reverse Mortgages Are Worth Looking Into
If a residence isn’t paid off when you or your loved one leaves the workforce, carrying a mortgage can be a financial burden. However, if the residence has built up equity, you or your loved one may be able to access a reverse mortgage.
To find out more about reverse mortgages, start with the Department of Housing and Urban Development.
Annuities can Strengthen Your Income Stream
Insurance companies offer “income insurance” through annuities. These are insured lifetime payments, unbeholden to market performance, that will strengthen your income stream. Find out more about annuities.
State and Local Programs that help older adults with property taxes
Your state or local municipality may offer property tax breaks to senior citizens who meet income limits. Details will be different according to locale, but programs include homestead exemptions, senior freezes, payment plans, deductions, and lower assessments. These can significantly decrease your property tax bill if you qualify. Check the local property assessor or county tax office to see what is available.
Veterans: Aid & Attendance and Long Term Care
As a veteran, one may qualify for special programs through the VA’s Aid and Attendance benefits and Housebound allowance. These provide additional funds to qualified Veterans and survivors. If long term care is necessary, the VA provides short stay or lifelong options for Veterans. Learn more at the VA Geriatrics and Extended Care.
Social Security Benefits Play a Big Role in Retirement Income
Will be a big part of many workers’ retirement portfolios. For middle earners, Social Security will replace 40% of their pre-retirement income, according to the Social Security Administration. For retirees in 2021, this means a monthly Social Security check in the amount of $1,543. To find out what you, or your loved one needs, start by checking out the Social Security Administration’s Understanding the Benefits guide.
Medicare is the Main source of Health Insurance for Most Older Adults
Medicare is our country’s health insurance program for people age 65 or older that helps with the cost of health care. Unfortunately, it doesn’t cover all medical expenses or the cost of long term care. To find out more details, start with Medicare.gov.
Medicaid Support is Available to Seniors in Need
If income or savings are lacking, learn about support services for low to moderate income older adults and how to handle your assets in case you need to apply for Medicaid. To learn more visit Medicaid Planning Assistance.
IRS Tax Deductions Available to Older Adults
Older adults receive special tax deductions when they reach 65 years old. The IRS has put together a tips sheet to help older adults or their loved ones navigate the tax system.