Several factors go into planning your retirement, including preretirement income and desired retirement lifestyle. However, planning your retirement can be challenging due to the unpredictable nature of planning for the future. To best prepare you and your loved ones, we have gone ahead and put together a quick retirement planning guide for you:
Use the 80% Rule
The 80% rule explains that you should expect to need at least 80% of your preretirement salary for every year of retirement. For example, if you made $40,000 before retirement, you should plan on needing about $32,000 each year of your retirement. This example is simply a rule of thumb and does not account for every retirement lifestyle. Depending on the retiree’s lifestyle, the percentage may need to increase to 90%, 100%, or possibly more.
Plan on healthcare expenses going up
Medicare coverages differ from employer-paid health insurance. As a result, many seniors fail to realize that routine coverage such as eye exams, foot care, and hearing aids are not covered. Therefore, planning for the unexpected is an essential part of planning for retirement, particularly when it comes to healthcare.
Consider possible tax increases in retirement
Many seniors expect their taxes to go down during retirement. Unfortunately, due to income from 401(K) and IRA plans can affect the taxable income some seniors pay, which can dramatically and directly affect their monthly income.
Find Ways to Finance Retirement
The average adult should be putting aside about 15% of their income to their retirement fund throughout their career. However, due to increases in living expenses and medical costs, even the most organized retirement plan can get thrown off track. One of the best ways to help finance retirement is by selling your life insurance policy also known as a life settlement. A life settlement will eliminate your premium payments and provide a great way of supplementing your retirement. Many policyholders over the age of 70 choose to sell their life policy because the benefit of using the money now greatly outweighs the death benefit and may provide additional retirement security.
Are you interested in turning your life insurance policy into cash? MRE Finance can help! Our team of specialists will help assess your policy. Call us today to see if your policy qualifies for a life settlement or try our free estimate* calculator.