Have you ever wondered what senior lifestyle options are available to you or a loved one? Whether you are considering in-home care, a retirement home, or an assisted living facility, there are measures you or your loved one can take to ensure a quality senior lifestyle. Many seniors are not aware of all the options available to them to make retirement more affordable, such as safe ways to increase income and measures to avoid unnecessary taxes, loans, interest, and fees. Curious to know if you are making the most of your retirement? We have created a guide every senior should review to ensure they are making the most of their retirement.
Senior Financial Obligations
When deciding where you want to live during retirement, there are several considerations to take into account. The first consideration should be the budget, which is the most significant factor in determining retirement lifestyle options available to you or a loved one. The average American senior-aged 70 or older typically spends an average of $45,756 a year, or about $3,800 a month on financial obligations. This can vary greatly depending on the senior’s location as well as the specifics of their health care and personal needs. However, many seniors admit they do not have enough retirement income or savings to pay for the many financial obligations that come with retirement. Below are a few everyday financial obligations seniors often worry about covering.
It’s no secret that healthcare is one of the most considerable financial challenges for seniors. On average, seniors 65 years old and older pay about $20,000 in medical bills and prescriptions annually. About 62% of individuals who filed for bankruptcy claimed medical bills and loss of income due to caretaking to be the top two reasons for the bankruptcy.
Life Insurance Premiums
Senior life insurance premiums can jump in cost at the age of 75. This expense is something that can easily be removed and even traded for cash with a life settlement. You can get a free estimate today!
About 25% of adults do not believe they will need long-term care, but nearly 70% of seniors will need long-term care. The median annual cost for an assisted living facility last year was just over $50,000. The price for long-term care can range; however, $4,000 per month is a reasonable estimate out of pocket.
If you or a loved one develops dementia or Alzheimer’s, you or they may need memory care. Memory care is one of the more expensive types of long-term care. Several factors contribute to this, including the specialized skills and training required of staff and increased safety and security measures. On average, memory care costs roughly 20-30% more than assisted living in any given area. Many memory care establishments are private and typically cost $7,000-$10,000 per month, and the cost for memory care adds on an additional $1,000-$4,000 a month to long-term care costs. The average length of stay in a memory care unit and/or assisted living community is two to three years. However, that amount of time may vary widely, from just a few months to ten years or more. Paying for assisted living and or memory care is one of the biggest financial strains on seniors, especially when you consider that Medicare pays for only the first 100 days in a nursing home. After 100 days, nursing home care can be paid for with your personal resources, Medicaid, or a combination of the two. In the later stages of dementia, people often need more care and are unable to live at home. At this point, 24-hour care may be necessary. One alternative to pay for assisted living and or memory care is to purchase a long-term care policy which can be expensive if not purchased before retirement. It is important to note that once an individual is diagnosed with Alzheimer’s, he or she will not be able to apply for long-term care insurance coverage.
Retirement Income Taxes
Retirement income taxes are another expense many seniors can avoid. Retirement income tax laws vary by state, and many seniors opt to move to a state that does not tax their income. As far as the U.S. states best for avoiding income taxes, take a look below under the subtitle “Top Ten States for Retirement”.
Retirement is the perfect time to take dream vacations. Whether it is taking the children and grandchildren for a fun family trip or traveling the world, many seniors plan on using some of their retirement income to pay for trips they have long-awaited.
Many seniors set aside savings to help their grandchildren and children. Some financial ways seniors help their grandchildren are paying for college tuition or assisting with major milestones, such as a wedding or first home. To keep up with retirement costs, many seniors try to eliminate or reduce their monthly expenses or increase their income.
However, many seniors find that they cannot reduce their costs; it is simply the cost of living in their area. Some seniors consider getting a part-time job. However, employment as a senior can be challenging due to several factors, including compromised health or transportation challenges. This leaves many seniors realizing they need more income but few ways of finding it.
Increase Income with a Life Settlement
As the cost of living continues to increase, many seniors struggle to find a way to cover all their expenses. As a result, many seniors find themselves in substantial debt and can even become a financial burden to their loved ones. However, a life settlement can bring life insurance policyholders a lot of peace and stability to enjoy their retirement.
What is a life settlement?
If you are looking for a way to pay off your current mortgage or perhaps finance the retirement home of your dreams, consider selling your life insurance policy. If you or your loved one is 70 years or older, you may qualify for a life settlement with MRE Finance. A life settlement is a legal transaction between a life insurance policyholder and a third-party buyer known as a settlement provider, who offers cash payouts typically higher than the policy’s cash surrender value and less than the total death benefit. Bottom line: a life settlement can get you the cash you need without losing equity.
In addition to receiving a cash payout, other reasons to sell your policy through a life settlement include:
Getting rid of high policy premiums
No longer needing the insurance policy
No longer wanting the insurance policy
The policy is about to expire
What is a viatical settlement?
A viatical settlement is a life settlement for the terminally ill or those who experience severe chronic illness. A terminally ill policyholder is someone who has been given a life expectancy of fewer than two years. A chronically ill policyholder is limited in their ability to perform two or more daily living activities, such as eating, bathing, or dressing. As is the case with life settlements, viatical settlements provide policyholders with a chance to make the most out of unwanted or unneeded life insurance policies. Policyholders often find financial freedom thanks to viatical settlements, as they receive proceeds that are more than the cash surrender value but less than the death benefit.
Retirement Lifestyle Options
There are several factors to consider when it comes down to selecting a retirement home, including one’s budget, preferred retirement lifestyle, and current living situation.
Other questions seniors who are reevaluating their lifestyle should ask include?
Do you have the means and energy to keep up a home on your own?
Can you afford to live in your current situation?
Will you be requiring assisted living services?
Have you been dreaming of living in your favorite vacation destination?
Are you considering buying a vacation home or timeshare?
Which retirement lifestyle suits your needs best?
Aging in Place
This form of senior living refers to living in your own home and not choosing to move at all. This option is excellent for seniors who are still independent and may even have a family at home to assist them. However, for many seniors, living in their homes means planning for in-home care costs. In 2020, the monthly median price for homemaker services was $4,400, and the median home health aide cost was $4,500. For many, these costs are in addition to monthly mortgage or rent bills.
Here are some other factors to consider about aging in place:
Will you be able to keep up with home maintenance?
Can you afford meal delivery?
Can you afford to install modifications for senior living, including bathroom grab bars, medical alert systems, or possibly a wheelchair ramp?
If you prefer to live in your own home, have you considered buying a home in an area better suited for retirement? Many seniors making monthly mortgage or rent payments worry about whether they can continue to make payments throughout the entirety of their retirement. One solution is to move to an area or home that costs much less, making your money go farther.
This style of senior living refers to housing designed exclusively for seniors and is a community that provides opportunities for socializing and usually includes assistance with home maintenance. This can be in the form of a retirement community, a retirement home, or senior apartments or homes. Independent living is an excellent option for seniors who are self-sufficient but do not want to worry about home maintenance. Some facilities offer meal assistance and housekeeping as well. Additionally, independent living communities often provide various activities and social events for residents to enjoy.
Are you looking to socialize with other seniors your age?
Do you want the freedom of living on your own?
Are you tired of maintaining a home?
Is this option within your budget?
Many seniors love the freedom that retirement communities, villages, and homes offer them while not having to worry about maintaining their home or making necessary adjustments to their home to make it suitable for their needs. However, this option can be costly, depending on the location and amenities selected.
Long-Term Care Facilities
Long-term care comes in various forms, including assisted living and nursing homes. These facilities help people who require different health or personal services and can no longer perform these activities independently. Many of the “activities of daily living” provided in long-term care are assistance with various everyday activities, including eating, bathing, dressing, and moving around.
Here are some questions to consider for anyone who may require long-term care:
Do you suffer from a chronic illness?
Do you rely on others to perform routine care?
If you rely on care for at least two activities of daily living, have you considered a viatical settlement to help pay for it?
If you or your loved one needs long-term care, are you able to afford it?
Seniors across the country have achieved financial freedom by selling their life insurance policy through a life settlement or viatical settlement to afford better lifestyles during retirement.
Top Ten States to Retire In
Many retirees look to move for various reasons. Some choose to move to a beloved vacation spot. Others seek less expensive home options to make the best of their retirement savings. Whether you want to find a lower cost of living, purchase a vacation home, or look for a great retirement community, some states allow your retirement income to go much farther than you originally planned. We have gone ahead and put together a list of conditions to consider when shopping for a retirement destination.
Florida offers retirees several great reasons to retire along its sunny beaches, including no state, estate, or inheritance taxes. Additionally, there is no income tax. This means your IRA and pension plans will not get taxed. Finally, the most popular reason to retire in Florida: the never-ending list of fun-in-the-sun activities the state offers retirees and their families alike. Whether it is inviting your family for a Walt Disney World getaway or hosting family vacations at the beach, Florida offers retirees countless opportunities to make memories with their children and grandchildren year-round. Lastly, Florida offers some of the best healthcare facilities for seniors. Florida’s cities range significantly in lifestyle, beach access, and diversity. Some great cities to look at including Sarasota, Naples, Tampa, Pensacola, Jacksonville, Orlando, and Lake Mary.
Tennessee offers scenic views of mountains, plenty of outdoor activities to stay busy, and provides retirees with a low cost of living. As one of the states with the lowest cost of living, Tennessee makes it easy to purchase a charming home and low property taxes. Additionally, it does not tax income either, meaning your retirement income that comes from IRA and 401(k) plans can go much farther in Tennessee. Country music lovers flock to Tennessee, and with good reason, it offers plenty of country music entertainment and history. Tellico Lake, Franklin, Knoxville, and Chattanooga are just some of the best locations for retirees to live in Tennessee.
Reasons that make Texas a wonderful retirement state include its low cost of living, various outdoor activities and attractions, and temperate weather. The overall cost of living is 10% less than the national average, and there is no state income tax, making a living off IRA, and 401(k) plans much more manageable. Texas also has a rich history and is one of the most diverse states on the list. It offers various cultural, art, and music attractions that will keep anyone busy and entertained. Some of Texas’s best cities for retirees include Dallas, Houston, and Austin due to their low housing costs and ample access to excellent healthcare options. Houston is great for lifetime learners as the University of Houston allows seniors 65 years of age and older to audit courses for free.
If you are looking for a warm state with beneficial tax regulations, you have more options to choose from than just Florida. Georgia is a beautiful state with a low cost of living. Unlike Florida, Georgia does experience changes in season and is not as tropical as Florida, meaning fewer hurricanes threats and seeing the foliage change colors throughout the seasons. Additionally, Georgia sees much lower health costs for retired couples than the national average, and the cost of living is lower than the national average as well. If Georgia interests you, check out some of these great retirement cities: Macon, Waycross, and Riverdale.
If you love the nightlife, Nevada might be the right retirement destination for you. This state is another popular retirement destination as it is home to world-class entertainment and some of the best restaurants and casinos. In addition to the never-ending list of activities, Nevada also has low property taxes, and it does not have a state income tax. Another positive of living in Nevada is the pleasant climate. Light rainfall, no hurricanes, no snow, and mild temperatures from fall to spring. Some great cities to look at include Paradise, Reno, and Henderson.
Residents of Pennsylvania are exempt from paying taxes on retirement income, and they enjoy a 3.07% sales tax, the lowest flat tax rate in the nation. Pennsylvania sees four distinct seasons for those that still want to see sun, snow, spring flowers, and autumn leaves change. As far as healthcare, from world-class health systems to various VA hospitals, Pennsylvania has a lot to offer. This state is a great choice for history and art lovers and beer and wine enthusiasts as PA has several museums, galleries, theatres, wineries, and breweries.
Much like Tennessee, this state offers senior residents plenty of beautiful landscapes as it is home to various mountain ranges, including the Great Smoky Mountains and the Blue Ridge Mountains. Cities like Charlotte, Ashville, and Raleigh make living on a budget not only possible but also enjoyable. The weather is warmer than in many other locations, making it ideal for seniors who love the outdoors. However, seniors can still enjoy the change in seasons, unlike some other states on this list like Florida. And although North Carolina is not the most tax-friendly state, it does not tax Social Security benefits.
Like other states on this list, Alabama is another state that does not tax social security benefits. Additionally, property taxes are among the lowest in the country at just 4%, as income tax rates range between 2% and 5%. With how much you can save on taxes, you can live it up in this state’s low cost of living. Alabama also offers sunny beaches and warm weather and the benefits of its neighboring states, such as Florida theme parks to the south and the Great Smoky Mountains to the north.
Many seniors would love the chance to retire in Hawaii due to its gorgeous scenic views and laid-back lifestyle. However, many assume it too expensive, and at first glance, they’re not wrong. Before you write this state off completely, consider that Hawaii offers seniors a few ways to save money to afford the higher cost of living, including no taxes on Social Security benefits or public pensions. Additionally, Hawaii’s health care costs are almost 12% cheaper than the national average. So, for a retired couple who has plenty of medical bills and loves Hawaii’s natural beauty, it might be perfect.
Like Hawaii, living in New Hampshire is not cheap, and the weather can be freezing. However, we picked this state due to its incredible senior health access. Although the cost of living is higher than the national average here, New Hampshire does not tax Social Security or earned income and does not have a sales tax, which can help mitigate the higher cost of living and property taxes. Lastly, New Hampshire showcases some of the most beautiful natural backdrops in the country. New Hampshire is an excellent pick for seniors who would love the snow and need good healthcare access. If New Hampshire interests you, be sure to research the following cities: Rochester, Manchester, Nashua, and Concord.
This list is not exhaustive and does not take into consideration each reader’s specific needs. The best way to know which state works best for your desired retirement lifestyle, speak with a financial advisor. Senior living can be expensive, and you have options. Thankfully, there are steps you can take to create more financial security for you and your loved ones. If you or your loved one is interested in qualifying for a life settlement cash payout, call the experts at MRE Finance. Our dedicated team of specialists has extensive experience helping seniors, terminally ill, and chronically ill individuals make the most of their life insurance policy, providing them with peace of mind and financial freedom.