Considering retirement can be daunting. For a very long time of your life, most of your twenties and thirties, it seems far away, as if it’s something that only very elderly people will do someday. And then, in your forties, there is the gnawing realization that you, too, will be elderly someday, and must prepare ahead. The earlier you begin preparing, of course, the better off you will be.
When it comes to costs during retirement, housing is one of your largest, if not your largest expense. If you have purchased a home, hopefully by this time your home can be paid off. This will cause your expenses for living to be those which are necessary for electricity, water, and food, all of which are generally more manageable than housing, which is far more. Likewise, if your house is paid off, then you can use a reverse mortgage if absolutely necessary, to pay for living expenses, if carefully gauged over time. You will need, though, maintenance costs saved for home repairs.
If you have a limited income, you can use Medicaid to cover some of your healthcare expenses. This gives you a bunch of better options than perhaps your insurance had. Why? Because Medicaid pays 100% of most doctor’s appointments and medications. This can prevent you from going without needed medicines in order to pay other expenses.
Alongside housing and medical, your other needs in retirement are similar to your needs in daily life. You will need, of course, food, water, electricity, your phone and internet, and transportation costs. All of these will increase as you age, of course, as they continue to do with inflation. So, it will be important to realize that as you budget carefully for general utilities and necessities over time, that you will need to have more per month for those things in the future than you need now. Some retirees have the option to add travel to their transportation costs. If that is your opportunity, those costs should also be factored into savings, of course.
Your retirement will be coming, whether creeping up gradually, or zooming closer daily! Finding a financial planner and planning now will help you with future needs. It’s crucial to add as best you can to what savings you can create, and to attempt to increase that amount as you progress towards your future goals.
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