Saving for retirement usually occurs for an extended period, and it is necessary to assess your savings progress to know if you are planning well for your retirement. You don’t have enough savings if you discover that you are not fit for retirement at the official retirement age. By the time you are 50 years old, you should be on track to achieve your retirement goals. Here are three milestones that will make you fully prepared for your senior years.
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Estimate the amount you need to save
Suppose you are in your fifties, you only have about ten years to make more retirement savings. You should know the amount of money that will make you comfortable during this period when you retire.
If you don’t know the amount you need to save, you can calculate the amount anytime. Suppose you don’t have a target amount; you need to ensure that your retirement goals have not changed by recalculating your retirement number. You may discover that you need more retirement savings than what you have in mind. You should realize this earlier before your retirement period begins.
With a retirement calculator, you can run your information through the calculator to know your savings target. During your calculation, make sure that you consider other retirement income sources to reduce the amount you need to save.
- Determine how to cover your long-term care
Long-term care is among the most expensive expenses you will face during retirement. According to the Department of Health and Human Services, you will pay about $7,000 every month if you want to stay in a nursing home. The average person’s need for long-term care lasts for about three years. Therefore, an average person will spend approximately $250,000 on long-term care expenses.
You will pay this bill yourself because Medicare doesn’t cover this bill. It is better to prepare for these expenses because about 70% of seniors will need long-term care during retirement. You can reduce long-term care costs by enrolling in long-term care insurance. You may not need long-term care for a long period of time, but you will reduce the premiums when you enroll in your early years. Suppose you don’t want to enroll in this insurance; you need to have some cash in your HSA or retirement portfolio that will pay these expenses.
- Consider the age you will claim your Social Security
A survey from the Society of Actuaries shows that Social Security benefits are a significant income source for about 64% of American retirees. You need to make the best decision about when you should start claiming your Social Security benefits because you will rely on these benefits as your primary source of money during retirement. The earlier you claim your benefits, the lower your monthly benefits. Your Social Security benefits will be permanently reduced by 30% if you start claiming them when you are age 62. If you delay the benefits until you are age 70, you will receive your full benefit and an additional 24% every month.
You should consider your target retirement age because it will eventually impact your Social Security benefits. You must note that you don’t need to retire while claiming your benefit. Suppose you retire in your sixties; you can delay your benefit until you get the highest amount. Make sure that you know how your target retirement age will affect your Social Security.
It is not easy to save for retirement. Still, with perfect retirement goals, you will save a large enough amount that will make you comfortable when you retire. When you check these three milestones, you have a higher chance of living a financially secured life after retirement.
