Senior Retirement

Senior retirement planning can be a panic-inducing endeavor. You may feel as though you started too late, saved too little or underestimated your expenses based on a pre-recession retirement plan. Senior retirement planning has changed drastically over the last several years, and the unpredictability of the market is causing financial advisors to urge seniors to save more conservatively. This means starting early, saving aggressively and avoiding risky investments, particularly if retirement is within 10 years.

Senior citizens over the age of 65 who are already fully retired are probably fairing fine. People 65 and better are in stronger financial shape than that age group has been in years. Social security benefits are rising, inflation-linked pensions are keeping up with the value of the dollar and this age group is the only demographic that has experienced growth in average household income. For those who are in their 50s and see retirement slipping farther and farther away, it is never too late to alter your senior retirement plan.

Planning for Retirement

It is never too early to start saving for retirement. Experts recommend that people as young as 25 start saving now to combat the rate of inflation and uncertainty about the state of Social Security. Chances are, you have started saving. Keep it up, and save as aggressively as your budget will allow. Though many people have hit a bump in the financial road, resist tapping into your 401(k) or IRA; the penalties for doing so can be difficult to recover from.

People planning early for senior retirement have the freedom to participate in high-risk, high-return investments, but now is not the time for a 60-year-old to unload all of his money in risky stocks or real estate speculation. Stick with safe investments like money market accounts and high-yield savings accounts, which are highly liquid, or fixed annuities and CDs if you have more time to invest.

In order to save effectively, you must know how much you will need to retire. To maintain their current standard of living, most senior citizens must have saved 70 to 80 percent of their pre-retirement income, and that number jumps to 90 percent for low earners and single-income families. Social Security benefits will pay approximately 40 percent of your pre-retirement income. Planning for senior retirement was easier in our parents' time, but people are living much longer these days, so that money has to stretch an extra decade or more.

If you are just a few years away from retiring, suffer ailments that could force you to retire earlier than you hoped, lost everything in the stock market or myriad other scenarios that have you convinced you could be working until you're 90, it's time to make drastic changes to ensure you are ready at a reasonable age to retire. Cutting expenses means altering your current quality of living so you can live out your senior retirement years comfortably. As the housing market recovers, consider selling or renting your home to move into a small apartment. Downsize to being a one-car family, and use public transportation where available. It could also help to increase your income by transitioning to a part-time job before fully retiring.

Considering Your Health

On average, 20 percent of senior retirement savings go toward medical care. Your health has a strong bearing on your plans to retire. In the past, lifelong health insurance was almost a guarantee for retirees, but the cost of healthcare today has skyrocketed, and many senior citizens have trouble paying for medical care and prescriptions.

Be proactive about your health in your senior years by starting a regimen of preventative care. Be diligent about an annual physical, teeth cleaning and eye exam. Follow your doctor's recommendations for procedures like colonoscopies, mammograms and other screenings. Many health insurance providers reward policyholders for getting preventative care with lower rates, so be in touch with the company regularly about keeping your rates reasonable as you age.

Doctors will assist you in maintaining your health with simple plans to exercise, sleep and eat right. Stay active, both physically and mentally, by taking walks, engaging in sports and doing brain-teaser puzzles. Get plenty of sleep at regular hours, and eat healthfully. Staying social can also do wonders for your mental and physical health, so visit with grandchildren and neighbors, and volunteer in your community.

By staying on top of their health early on, senior citizens can stave off the ailments that chip away at senior retirement savings. At age 65, senior citizens are eligible to receive Medicare benefits. Talk to a financial advisor about managing Medicare, prescription drug plans through Part D and services available to help with expenses for low-income earners. Senior retirement should be a time to look forward to, and mindful planning can help you make the most of your retirement.

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