Tips to Maximize Your Savings Near Retirement

11 mars 2023

Are you approaching retirement ? 

The five years before and after can be critical for your finances. But one expense that many people forget to factor in is long-term care, which nearly 70% of retirees will need at some point. Unfortunately, Medicare doesn't cover this expense, so you may have to pay for it yourself. And the cost can be extremely high, especially if you end up in a nursing home.

So what can you do to protect yourself ?

Consider buying long-term care insurance while you're still relatively young and healthy, ideally between the ages of 50 and 65. After that, premiums can get very expensive, and you may even be denied coverage if you wait too long. The average annual premiums for a healthy 65-year-old man and woman are $1,700 and $2,700, respectively. But the average cost of a private room in a nursing home is $108,000 per year, so paying for insurance can actually save you money in the long run.

 

If you can't get long-term care insurance because of a pre-existing condition, consider maxing out your contributions to a health savings account (HSA). This will help you prepare for the financial impact of long-term care, and you can use the money tax-free if you use it for medical expenses.

 

Of course, retirement planning is never simple, especially in today's volatile economy. That's why it's a good idea to work with a financial consultant who can help you anticipate the risks and make smart decisions. The earlier you start, the better off you'll be.