8 Insurance Products You May Not Need

These days, it seems like every other television commercial is for yet another insurance product. While consumer choice can be a good thing, not all insurance is as essential as the ads make it seem. “There’s a lot of sales and marketing based on fear that especially targets retirees,” says Jonathan Howard, a certified financial planner with SeaCure Advisors in Lexington, Ky., as well as a former insurance salesman. “People end up buying because they’re terrified of a loss rather than to cover an actual insurance need.”

Although Howard believes insurance plays an important role in anyone’s financial plan, some products are more about protecting the insurance company’s bottom line rather than yours. Insurance decisions shouldn’t be made in a vacuum. They should consider your entire financial picture. That way, you can identify the gaps and figure out the coverage you truly need, along with any you could do without. Above all, never buy insurance hastily based on fear, especially if it involves the products on this list.

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Long-Term Disability

If you’re still working but nearing retirement, consider whether your long-term disability coverage is worth keeping. The premium for an employer group plan typically increases with age, says Greg Klingler, director of wealth management at the Government Employees’ Benefit Association in Fort Meade, Md. 

The policy also will limit the payout period until a particular age, such as 65. As this age nears, your maximum possible benefit shrinks. This is especially true for someone who could have retired earlier but is still working. “You’re no longer dependent on your salary, so weigh the value of protecting this extra income versus the high insurance cost,” says Klingler.

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Product Warranties

A woman standing next to a broken dishwasher A woman standing next to a broken dishwasher

When you buy merchandise like computers, televisions, smartphones, and home appliances, chances are the vendor will try to sell you an additional warranty to replace or repair the item after you buy it. Ask yourself whether you have enough savings to replace the product yourself.

By design, insurance must collect more in premiums than it pays out, making it a net negative for the average policyholder. Most policyholders collect nothing. 

For major assets like a house or vehicle, most people would find it difficult, if not impossible, to replace them out-of-pocket, so insuring these assets with a home or auto policy makes sense. But for smaller things that you could easily replace yourself, like a $700 laptop, skip the warranty and self-insure instead.

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Critical Illness Insurance

Doctors wheeling a patient on a gurneyDoctors wheeling a patient on a gurney

A stroke, heart attack, life-threatening cancer and an organ transplant are just some of the serious health issues that critical illness insurance covers. If you develop one of these conditions, the insurer sends you a lump sum cash payment, ranging between $10,000 and $50,000, that can be spent however you want. 

Despite this flexibility, Howard isn’t crazy about this type of insurance, “where unless a specific situation happens, you don’t get anything back.” He suggests reviewing your potential out-of-pocket costs for health insurance to see whether you need critical illness insurance or if you could manage the bills with savings.

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Social Security Insurance

All the dysfunction and uncertainty in Washington has led to a new product: Social Security insurance. It’s a type of annuity, an insurance contract that turns part of your savings into future income. When you add this insurance to an annuity, the insurer promises your annuity payment will increase to cover any government shortfall that results in a smaller Social Security benefit.

Howard doesn’t think this is a good return on your money. “Retirees vote, and they predominantly live in swing states,” he says. “If the government ever reduced Social Security for people already claiming it, they’d never hear the end of it.”

Perhaps benefits will be cut for future generations, but Howard doesn’t expect those already collecting benefits to have a problem.

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Individual Dental and Vision Policies

A woman undergoing an eye examA woman undergoing an eye exam

Travis Price, a Medicare insurance agent in Traverse City, Mich., does not think individual dental and vision policies are worth buying in retirement. “When people are working and get group dental/vision, the insurance coverage is heavily subsidized in the group and by their employer. When they get into the individual marketplace, the coverage costs can increase 10-fold for less coverage.”

Not only are premiums higher for individual plans, but they could also have high out-of-pocket costs for care, an exclusion of major services for the first year of coverage, and a limited annual coverage limit. Price says an entry level plan meant to cover both dental and vision can be capped at $1,500 per year. “Often, seniors are better off simply being a cash patient and negotiating cash costs with their provider,” says Price. Another alternative, he says, is finding a Medicare Advantage plan that includes dental and vision coverage.

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Long-Term Care Insurance

A doctor shaking hands with a patientA doctor shaking hands with a patient

No one disputes that long-term care in the United States is an expensive risk. A private room in a nursing home costs more than $90,000 a year, on average, according to the U.S. Department of Health and Human Services. 

Still, both Howard and Klingler dislike traditional long-term care insurance policies because of their high premiums. “The cost varies based on the carrier, the amount of coverage and the applicant’s health, but I’ve seen [premiums] around $5,000 a year for a couple in their 60s, $10,000 a year when they’re in their 70s,” says Howard. He also notes that premiums rise over time based on age even after you sign up. 

Howard says traditional long-term care insurance is another example of insurance that only applies under such narrow, specific circumstances that it’s not worthwhile, particularly given its hefty cost. As an alternative, he prefers an LTC-hybrid life insurance policy because that way, if someone doesn’t need long-term care, the heirs receive the death benefit instead.

Klingler suggests considering other resources before buying any long-term care policy. “In almost all cases, you don’t need to cover the full cost [of care],” he says, because some expenses, like food, housing and utilities, would be provided by the long-term care facility.

Even when one spouse enters long-term care while the other remains in the couple’s home, some daily living expenses are still reduced. If you’re considering long-term care insurance, ask yourself whether you need to cover the full cost of a nursing facility or if you could go with a partial benefit that’s more affordable.

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Rental Car and Travel Insurance

It happens in a flash. You’re at the rental car counter at the start of a trip, when the agent asks if you want insurance. Well, why not get it? It’s only another $12 to $15 a day. The thing is you might already have rental car insurance through your credit cards, auto policy and membership in an organization like AAA. 

Your credit card may provide other types of travel insurance as well, such as coverage for lost bags, trip cancelation, emergency evacuation, and emergency medical and dental insurance during the trip. Your health insurance may cover you for medical emergencies, too. Before buying any travel insurance, study what you already have through your existing benefits.

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Any Redundant Insurance Coverage

File folders with different financial products written on them, including insuranceFile folders with different financial products written on them, including insurance

Although the classic example is rental car insurance, there’s often a fair amount of overlap with the insurance people have. Your auto insurance covers medical bills after a car accident, but so could your health insurance. Your homeowners insurance covers liability for an injury on your property and so does an umbrella policy, which should offer enough supplementary coverage, if needed, to protect your net worth. 

But don’t go overboard buying insurance. Given this overlap, it’s possible that the limits on your existing policies are higher than necessary because they cover the same risk. It’s also possible that the coverage provided by even one of those policies exceeds what you truly need. Howard recently found that his homeowner’s coverage was for $100,000 more than the replacement cost of his home. 

Source: kiplinger.com

How Much Does Medicare Cost? – Parts A, B, D, Advantage & Medigap

Americans are used to paying high costs for health care. Even for those who have health insurance — and as of 2019, there are still millions who don’t — it doesn’t cover everything. However, many people assume that once they reach age 65 and start receiving Medicare benefits, it will cover all their costs. After all, we’ve already paid into the program through payroll taxes, so we should have no costs beyond that, right?

Wrong. In fact, the Medicare taxes you pay during your working years only cover the premium costs for Medicare Part A, or hospital insurance. However, you still have to pay a part of the costs for hospital stays and other inpatient care out of your own pocket. And on top of that, several other parts of Medicare have their own costs.

How Much Does Medicare Cost?

There are two primary forms of Medicare coverage. Original Medicare includes Medicare Part A and Medicare Part B, or medical insurance, which covers doctor visits and other outpatient care. You can also add Medicare Part D to cover prescription drug costs. Alternatively, you can choose a Medicare Advantage plan from a private insurer, which includes Medicare Parts A and B and usually adds coverage for drugs and some other types of care.

Put it all together, and your Medicare costs can add up to thousands of dollars. A 2020 analysis by AARP found that in 2017, people on Original Medicare spent an average of $5,801 on health care and that about 1 in 10 people spent $10,268 or more. (The analysis did not include people on Medicare Advantage plans because there was no reliable data available about their expenses.) These expenses fall into three primary categories: premiums, cost sharing, and expenses Medicare doesn’t cover.

Premiums

Most health insurance comes with a monthly premium — an amount you pay to the insurer each month for coverage. According to AARP, the average Medicare beneficiary paid $2,728 in premiums in 2017. However, this cost varied widely by age. People under 65 paid an average of $1,810, while those over 65 paid an average of $2,810.

How Much Does Medicare Part A Cost?

Most people don’t pay a premium for Medicare Part A because they have already paid for it through payroll taxes. However, if you have paid Medicare taxes for fewer than 10 full years (40 quarters), you must pay a fee to buy into Part A.

For the year 2021, the monthly premium is $458 if you’ve paid Medicare taxes for fewer than 30 quarters. If you have paid them for 30 to 39 quarters, the premium is $259. That adds up to either $3,108 or $5,496 per year.

Additionally, if you don’t sign up for Medicare Part A when you first become eligible for it, you must pay a late enrollment penalty. That causes your premiums to go up by 10%. You continue to pay the higher premium for twice the number of years you delayed signing up for Part A.

How Much Does Medicare Part B Cost?

All Medicare recipients pay a premium for Part B coverage. The standard premium for 2021 is $148.50 per month, or $1,782 per year.

If you have already started collecting Social Security benefits or retirement benefits from the Railroad Retirement Board, this premium is automatically deducted from your benefits check. Otherwise, you receive a bill for your coverage.

If you neglect to sign up for Medicare Part B when you first become eligible, you pay a late enrollment penalty for this as well. This penalty is even steeper than the one for Part A. It increases your monthly premium by 10% for each 12-month period you delayed enrollment — so if you sign up three years late, your premiums go up by 30%. Moreover, this higher rate lasts for the rest of your life.

How Much Does Medicare Part D Cost?

If you choose to add Medicare Part D to your coverage, you must pay an additional premium for it. The cost per month varies based on the plan you choose. However, the Centers for Medicare & Medicaid Services (CMS) estimates the average premium for basic Part D coverage at $30.50 per month ($366 per year) for 2021.

On top of that, there’s a late enrollment penalty for Medicare Part D. You pay this penalty if you go at least 63 days without having either a Medicare prescription drug plan or a Medicare Advantage plan that provides drug coverage. The penalty is equal to 1% of the “national base beneficiary premium” ($33.06 for 2021) times the full number of months you went without coverage, rounded up to the nearest $0.10.

This amount gets added to your Part D premium for life once you sign up. For instance, if you went 30 months without drug coverage, you would pay an extra $10 per month. Additionally, this penalty rises whenever the national base beneficiary premium increases.

Medicare also tacks on a monthly income adjustment for all beneficiaries whose income is above a certain level. For 2021, this adjustment ranges from $12.30 per month if your income is over $87,000 to $77.10 per month if it’s over $500,000.

How Much Do Medicare Advantage Programs Cost?

Medicare Advantage plans are sometimes called Medicare Part C, but they’re actually not part of the federal Medicare program. Instead, private insurance companies offer them. However, they must provide all the same coverage as Original Medicare, and many plans provide more.

When you join a Medicare Advantage plan, you continue to pay your Part B premium to the federal government. The government then pays a fixed amount each month to the insurer to help cover your care costs.

Some Medicare Advantage plans charge an additional monthly premium on top of your regular Part B premium. According to CMS, the average expected premium for the year 2021 is $21 per month. Since that’s less than the average cost for a separate Part D plan, Medicare Advantage is a cheaper way to get prescription drug coverage for the average Medicare user. However, specific prices and coverages vary from plan to plan.

According to the Kaiser Family Foundation (KFF), Medicare Advantage premiums are typically lowest for health maintenance organizations (HMOs), which require you to get your care from doctors within a specific network. They’re somewhat more expensive for preferred provider organizations (PPOs), which allow you to see an out-of-network doctor for an additional cost. The KFF does not evaluate old-fashioned fee-for-service plans, which let you see any doctor you choose, but in general, these plans are expensive.

How Much Does Medigap Cost?

Original Medicare has relatively low premiums, but there are also many costs it doesn’t cover. Many people buy Medicare supplement insurance, commonly known as Medigap, to fill the “gaps” in their Medicare coverage. These plans, sold by private insurers, cover your deductibles and coinsurance. Some of them also cover costs Original Medicare doesn’t, such as care received when traveling outside the United States.

If you buy a Medigap policy as an add-on to Original Medicare, you pay an additional monthly premium to the insurer. How much it costs depends on the specific plan you choose. Under state laws, Medigap plans are sorted into several standard categories, which most states identify by the letters A through N. A chart on Medicare.gov outlines each plan’s benefits. (Three states — Massachusetts, Minnesota, and Wisconsin — use different standard categories for Medigap policies. See each state’s specific rules.)

Insurance companies aren’t required to offer every type of Medigap policy. However, any insurer that sells Medigap policies is required to offer Plans A, C, and F.

According to eHealth Medicare, the monthly premium for a Medigap policy ranges from around $70 to $270 per month, depending on the plan type and where you live. According to Business Insider, Plan F — the most popular type of Medigap plan —  cost an average of $1,712 per year, or about $143 per month, in 2018. However, this cost varied by state, ranging from $1,310 per year in Hawaii to $1,947 per year in Massachusetts. You can find cost estimates for Medigap policies in your area by entering your zip code on the eHealth Medicare site.


Cost Sharing

On top of your Medicare premiums, you must pay a portion of the cost for all the health care services you receive. The AARP study found that Medicare recipients paid an average of $1,522 for their share of covered care in 2017. This cost came to $1,441 for beneficiaries under age 65 and $1,536 for those 65 and older.

How Much Are Medicare Deductibles?

Medicare requires you to pay a certain amount of your medical bills out of your own pocket before your Medicare coverage kicks in. This portion is called your deductible.

As of 2021, Medicare Part A charges a deductible of $1,484 for each benefit period. A benefit period starts when you enter a hospital or skilled nursing facility as an inpatient. It ends once you haven’t received any inpatient hospital care for 60 days in a row. That means you may have to pay your Medicare Part A deductible more than once in a single year.

For instance, suppose you go to the hospital for a knee operation in January, and they discharge you later that month. During that time, you pay all your care costs up to the $1,484 deductible. Then, in June — more than 60 days later — they admit you again after a fall. That starts a new benefit period, so you must once again pay all your care costs up to the deductible. There’s no limit to the number of benefit periods you can have in a single year.

Medicare Part B also has a deductible, but you only have to pay it once per year. For 2021, the Part B deductible is $203.

Medicare Part D plans usually have a deductible as well. The cost varies from plan to plan, but Medicare sets limits on how high it can be. As of 2021, your Part D deductible cannot exceed $445. According to eHealth, the average Part D deductible was $308 in 2019.

As for Medicare Advantage plans, some have deductibles and some don’t. According to eHealth, the average deductible for a Part C plan that includes prescription drug coverage was $292 in 2019. A plan can charge one deductible for all your care or have separate deductibles for medical care and prescription drugs. You have to look at the details of a specific plan to find out how much the deductible is and how often you need to pay it.

How Much Is Part A Coinsurance?

Even after you meet your deductible for Medicare, you must continue to pay a portion of your medical bills out of pocket. This amount is called coinsurance.

For Medicare Part A, the cost of coinsurance varies based on how long you spend in the hospital. You pay $0 for the first 60 days and $352 per day for the next 30. These numbers reset at the beginning of each benefit period. In other words, if you stay in the hospital for 60 days, then leave and return three months later, you’re back to Day 1 and your cost is $0.

If you stay in the hospital for more than 90 days at a stretch, you start using up your lifetime reserve days. You pay $704 per day, and Medicare pays the rest — but only for a maximum of 60 days over your entire lifetime. If you spend any more time in the hospital than that, you must pay the full cost.

That doesn’t mean you have to pay all your hospital bills in full for the rest of your life. Once you leave the hospital, your benefit period resets after 60 days. If you go back in, you start over again at Day 1, with 60 days for free and another 30 days at $352. But if you’re still in the hospital on Day 91 and you have no lifetime reserve days left, you’re responsible for the full cost.

How Much Is Part B Coinsurance?

Coinsurance costs for Part B are more straightforward than for Part A. After meeting your deductible, you pay 20% of the Medicare-approved amount for all covered medical expenses. The Medicare-approved amount is the standard amount Medicare agrees to pay all doctors and other health care providers.

You pay this 20% coinsurance for all services covered by Part B, including doctor visits, outpatient therapy, and durable medical equipment. However, if your doctor or provider charges more than the Medicare-approved amount, you must pay all the additional cost on top of your coinsurance.

How Much Are Prescription Drug Costs?

Costs for Medicare Part D vary. Some Part D plans require you to pay coinsurance — a percentage of the cost of each prescription. Others charge copayments — a flat fee for each prescription.

Many Medicare prescription drug plans sort covered drugs into different tiers. For instance, some drugs are “preferred” and have a lower copayment. According to the KFF, average costs for different tiers in 2020 were:

  • Preferred generic drugs: $0
  • Other generic drugs: $3
  • Preferred brand-name drugs: $42
  • Other brand-name drugs: 38% coinsurance
  • Specialty drugs: 25% coinsurance

Under Medicare rules, once your total prescription drug costs for the year — including the amounts paid by you and your insurer — have reached a certain amount, your coverage changes. This limit, which includes your deductible, is $4,130 for the year 2021. Once you hit this limit, you pay up to 25% of your medications’ total cost. The manufacturer of the drug pays 70% of the cost, and your insurer pays the rest.

However, that doesn’t necessarily mean you have to keep paying 25% for the rest of the year. Once your out-of-pocket costs for prescriptions hit a second limit — $6,550 in 2021 — your share of your prescription costs drops to only 5%.

To help you get out of this coverage gap (called the “doughnut hole”) faster, Medicare allows you to count the discount received from the drug manufacturer as part of your out-of-pocket costs. For instance, if you have a drug that costs $100, your insurer pays $5 for it, you pay $25, and the manufacturer pays $70. However, you can count a full $95 — your share and the manufacturer’s — toward your out-of-pocket costs. That pushes you closer to the $6,550 upper limit at which your payment falls.

How Much Are Medicare Advantage Costs?

Most Medicare Advantage plans charge you a copayment for doctor visits and other services rather than the 20% coinsurance you pay with Original Medicare Part B. However, the exact cost varies by plan. Factors that affect your copay costs include where you live, the type of plan you buy, and the company that issues it.


Costs Not Covered by Medicare

There are certain services Original Medicare simply doesn’t cover. In general, you must pay all your own costs for:

  • Dental care, including checkups, fillings, root canals, and dentures
  • Vision care, including eye exams, eyeglasses, and contact lenses
  • Hearing exams or hearing aids
  • Routine foot care, such as callus removal (according to AARP, Medicare does cover costs for foot injuries and ailments, such as heel spurs and problems related to nerve damage caused by diabetes)
  • Cosmetic surgery
  • Acupuncture
  • Long-term care in a nursing home or assisted living facility
  • Any medical care received outside the U.S.

You can get some of these expenses, such as dental and vision care, covered under a Medicare Advantage plan. However, it depends on the plan you choose. Neither Original Medicare nor Medicare Advantage ever covers costs for care received outside the country. However, some Medigap policies provide this coverage.

According to the 2020 AARP analysis, the average Medicare recipient in 2017 spent $1,551 on health care costs not covered by Medicare. This amount was $932 for beneficiaries under 65 and $1,662 for those 65 and up.


Limits on Total Costs

The $5,801 AARP says the average person on Medicare spends each year is a significant chunk of money. However, some Medicare beneficiaries have much higher costs. The 2020 study found that people at the 90th percentile for spending — those who had health care costs higher than all but 10% of the population — spent a total of $10,268 on their care in 2017. That includes $5,218 for premiums, $3,740 for cost sharing, and $2,537 for expenses not covered under Medicare.

In fact, under Original Medicare, there’s no limit on how much you can pay each year for health care. Although the program covers a large share of your costs, it doesn’t protect you from the kinds of sky-high medical bills that can drive people into bankruptcy. A 2010 paper from the University of Michigan found that more than 1 in 3 seniors who file for bankruptcy cite medical expenses as a reason.

There are two ways to put a cap on your out-of-pocket costs under Medicare. One is to choose Medicare Advantage. According to CMS, all Medicare Advantage policies are required to limit out-of-pocket spending for in-network care, which can be no higher than $7,550 in 2021. However, this out-of-pocket limit does not include the amount you spend on premiums.

If you prefer Original Medicare, you can cap your costs by adding a Medigap policy that comes with an out-of-pocket limit. Medigap Plan K policies limit your out-of-pocket costs to $6,220 for 2021, and Plan L caps them at $3,110.

You can estimate how much your total out-of-pocket costs are likely to be under different Medicare plans using the out-of-pocket cost calculator on Medicare.gov. It lets you compare Original Medicare, with or without Part D and Medigap, with a Medicare Advantage plan that includes drug coverage. The calculator factors in all your costs, including premiums, deductibles, and coinsurance. You can look at typical costs for plans with high, medium, or low premiums.


Final Word

If you’ve been thinking of Medicare as a permanent fix for high health care bills, it can come as a shock to learn how much the average beneficiary pays. However, the average cost cited in the AARP report is just that — an average. You can reduce your costs for Medicare the same way you would with any other significant expense: by shopping around.

Medicare makes it easy to comparison-shop for plans. On the Plan Compare page at Medicare.gov, you can review your Medicare coverage options and compare specific Part D and Medicare Advantage plans available in your area.

The site asks you for details about where you live and what type of plan you want, then lists available plans with their premiums, deductibles, copays, and out-of-pocket limits. With a little more information, it can also show you how much you’ll pay out of pocket for prescription drug costs on each plan. The site even includes star ratings for each plan just like you might use to find the best products when shopping online.

To learn more about comparing Medicare plans and signing up, check out our Medicare enrollment guide.

Source: moneycrashers.com

11 Things Retirees Should Always Buy at Costco

Couple shopping at Costco
Pictures_n_Photos / Shutterstock.com

The weekly runs to Costco bring to mind crowded parking lots and parents and kids loading up their carts in aisles full of bulk-sized items and standing in long lines.

But the big-box retailer is also a great place for anyone looking for great deals, including retirees. That group isn’t necessarily looking to fill up a pantry or closet with food, but they’re still looking for discounts as they manage budgets during the post-working years.

Take a tour through the aisles with us as we look at some of the many items retirees should be getting at lower prices at Costco — if they don’t mind the long lines.

1. Prescriptions

Costco pharmacy
Cassiohabib / Shutterstock.com

You don’t have to join Costco to take advantage of its generally low drug prices, as we detail in “7 Ways to Shop at Costco Without a Membership.” But joining brings additional perks for retirees looking to save on prescription drugs.

For example, Costco members who don’t have health insurance, or who have insurance that doesn’t cover certain drugs, can take advantage of the Costco Member Prescription Program. The retailer describes it as “a prescription drug discount card program that provides eligible Costco members and their eligible dependents with the ability to obtain lower prices on all medications.”

Retirees with Medicare as health insurance also can browse Costco-preferred pharmacy plans right on Costco’s website.

2. Eyeglasses

Older woman in eyeglasses
Diego Cervo / Shutterstock.com

Whatever your optical style — eyeglasses, contact lenses or sunglasses — you can find it for less at Costco. The retailer has an optical department, where you also can get an exam and help choosing what’s best for you.

Costco says it also accepts most insurance vision plans, and you don’t even have to be a Costco member to see an optometrist there.

3. Vitamins and supplements

Costco deals
Tooykrub / Shutterstock.com

Always talk to your doctor before trying any new vitamin or supplement. But after that, look to Costco.

The wholesale club offers an extensive selection of vitamins, multivitamins, dietary supplements and herbal supplements. Whatever you might need, Costco is bound to have it at a decent price, if not the best price — especially if you take advantage of sales.

Costco regularly offers additional discounts that it calls “Member-Only Savings” or “Warehouse Savings” but that are essentially sales, as we detail in “11 Ways to Save Even More Money at Costco.”

Money Talks News managing editor Karla Bowsher, who never shops at Costco without first checking the sales, says these discounts always include numerous price cuts on supplements. For example, Costco’s current sales, which are available through Feb. 28, include price cuts on more than a dozen vitamins and supplements.

4. Hearing aid batteries

Otolaryngologist putting hearing aid in woman's ear
Pixel-Shot / Shutterstock.com

The cost of hearing aid batteries can quickly add up, but you can get a 48-pack of hearing aid batteries from Costco’s house brand, Kirkland Signature, at warehouse locations that have hearing aid centers.

These locations also offer free hearing aid cleanings and check-ups, among other services, as we note in “How to Save Hundreds of Dollars on Hearing Aids.”

5. Mobility aids

Son pushing his father in a wheelchair
Halfpoint / Shutterstock.com

For seniors who need help staying on the move, Costco offers good deals on wheelchairs and walkers.

The retailer even sells medical alert systems. For more on these devices, check out Money Talks News founder Stacy Johnson’s advice in “What’s the Best Medical Alert System?”

6. Gift cards

Discounted gift cards on display at a Costco
melissamn / Shutterstock.com

Heading out to eat? Need gift cards for the grandkids? Be sure to check Costco first. It’s one of few places where you can buy gift cards for less than their face value — often 25% off, or more.

Restaurant gift cards are most common at Costco, but you can also find digital gift cards for gaming, for example.

7. Golf balls

Golf course
Isogood_patrick / Shutterstock.com

Playing two rounds of golf per week — 36 holes in total — and briskly walking the course rather than riding in a golf cart counts toward the American Heart Association’s recommendations for weekly exercise to reduce the risk of heart attack and stroke.

Before you hit the green, grab yourself a few dozen golf balls at Costco for a reasonable price.

8. Mattresses

Couple jumping on bed, holding hands
4 PM production / Shutterstock.com

Finding the right mattress is critical to battling insomnia and soothing aching bodies, and Costco lets you choose from a wide variety of brands, types and sizes — as well as bedding.

If you’re confused about which way to go, Costco has a handy buying guide.

9. Car rentals

kurhan / Shutterstock.com

While you may not plan to travel anytime soon due to the coronavirus pandemic, keep this in mind for your next trip: It’s not well-known that you can utilize Costco for renting cars, but doing so could save you.

Costco Travel offers a Low Price Finder search tool that lets you compare the rates of big companies, from Enterprise to Budget, to find your best price — one-stop shopping.

10. Cruises

Senior couple taking a selfie on deck of a ship.
View Apart / Shutterstock.com

Again, while the pandemic has left many cruise ships docked and vacant for now, it pays to know that you can buy your next cruise vacation through Costco, whenever that might be.

You can book cruises to a variety of places and with a variety of cruise lines. The Costco Travel website lets you explore options, by destination, cruise line and duration.

11. Caskets and urns

Funeral
Syda Productions / Shutterstock.com

They aren’t exactly enjoyable items to shop for, but a variety of caskets go for less than $1,000 at Costco. If you’re looking for urns, there are a few of those available as well — all for $120 or less.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Ready to Start Adulting? 10 Steps to Retire the Right Way

adulting responsible adults saving money
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This story originally appeared on NewRetirement.

If you are in your 50s or 60s, you are probably hoping to find the fountain of youth. However, when you plan your golden years, it is best to retire like an adult.

The Merriam Webster dictionary has added “adult” as a verb — not just a noun: “To ‘adult’ is to behave like an adult, specifically to do the things — often mundane — that an adult is expected to do.”

Being an adult means being responsible, dependable, self-sufficient, and maybe even knowing when it is a good time to throw these rules out the window. Examples of “adulting” include: cleaning up after yourself, paying bills on time, and — we would like to add — planning your retirement.

Keep reading for 10 ways to know if you have a reliable plan to retire like an adult.

1. You Know How Much Retirement Income You Will Have

Young couple working on a budget
Rido / Shutterstock.com

It will do you no good to hide from the truth when it comes to your retirement income. You need to know how much you will have and from what sources.

How much will you get from Social Security? Do you have a pension? An annuity? Will you work part-time for any amount of time? And, crucially, how much will you need to withdraw from savings every month?

The NewRetirement Retirement Planner makes it easy to find out how much retirement income you will have every year. And, you can run different scenarios to determine the best retirement withdrawals strategy for your needs and values.

2. Your Retirement Expenses Remain Below Your Income

retiree senior woman holding money
Motortion Films / Shutterstock.com

The most important rule of personal finance — spend less than you earn — applies to retirement as well. In fact, it is even more important than ever before. The risk you run of overspending is that you will actually run out of money.

The trick is that you actually need to make a good prediction and figure out exactly how much you will spend every year for the next 15 to 30 years.

3. Even Better? You Have Guaranteed Lifetime Income to Cover Basic Expenses

Happy seniors with money
Syda Productions / Shutterstock.com

Guaranteed lifetime income is income that you will receive for as long as you live — no matter how long that turns out to be. Social Security and most pensions are the most common examples of guaranteed lifetime income.

Many personal finance experts recommend that in retirement you have sufficient guaranteed lifetime income to cover your baseline retirement expenses — the money you need to spend to get by. Baseline spending includes housing, healthcare, and food.

To accomplish sufficient lifetime guaranteed income you have two choices:

  • Reduce your baseline expenditures to fall below the income you will have.
  • Increase your guaranteed lifetime income through the purchase of lifetime annuities or other strategies.

Try different scenarios in your retirement plan to figure out something that works for you.

4. You Have Paid Off Debt

Debt
Gustavo Frazao / Shutterstock.com

One of the greatest threats to retirement today may not be saving too little, but owing too much. A 2020 report from Experian found that baby boomers (those ages 57–74) are carrying a significant amount of debt into retirement.

The most adult way to handle debt is to pay it off before you quit working.

5. You Have Planned for Inflation

Inflation
GTbov / Shutterstock.com

When you are working, your wages generally rise as the costs of goods and services increase. Your earnings “keep pace with inflation,” so normal inflation is not generally a big concern. However, when you are living off of savings, inflation literally robs you of income.

The good news is that Social Security and some pension programs (though decreasing in prevalence) adjust your income for inflation. The bad news is that if you are living in retirement by withdrawing from investments or savings, then the value of your money will dramatically decrease over time. You will require far more money to support your lifestyle in the future.

By definition, inflation is when the cost of goods and services increases across the board. Stock prices also rise with inflation for the same reason: As the price of the goods and services a company produces rises, so does that company’s revenue. As a company’s prospects (including revenue) develop and grow, its stock price also tends to rise. As such, stocks can end up serving as a hedge against inflation.

However, as we age, our tolerance for risk decreases. Hence safer investments (such as bonds) become more and more attractive. Reconciling these opposing forces in creating the right asset allocation for you is no easy feat, requiring an understanding of your personal risk tolerance and investment time horizon.

Financial advisers can help you navigate designing an asset allocation strategy that outruns inflation, while managing risk.

6. You Have a Plan for Other Potential Risks

Money Business Images / Shutterstock.com

We can not predict the future. However, an adult retirement plan is one that mitigates the potential harmful financial effects of a long-term health event, a natural disaster, a car accident, a stock market crash, or some other unknowable future event.

Having the right insurance products and a dedicated emergency fund can protect you:

  • Be sure to evaluate your supplemental Medicare coverage every year.
  • Explore ways to cover a long-term care need.
  • Evaluate life, housing, and auto insurance needs.

7. You Evaluate Your Plans at Least Quarterly

couple improving their finances from home
Dean Drobot / Shutterstock.com

Retirement planning is not something you do once and then never think about again.

You need to maintain, update, and adjust your plans. It is a good idea to go through the details at least once a quarter and make updates as you and the economy change.

8. You Have a Responsible Plan for Investing Your Savings

Investing
Rawpixel.com / Shutterstock.com

Retirement investing is not all about getting the highest return possible. A responsible retirement investment plan matches how and when you need to access the money with your need for growth and security.

It is possible to do this on your own. However, it can also be useful to work with a financial adviser who has deep expertise in stocks, bonds, and other potential financial vehicles.

9. You Have Developed an Estate Plan

estate plan
Kellis / Shutterstock.com

Estate planning is a term broadly used to describe a variety of end-of-life planning issues. Your estate plan should include:

  • Opportunities to manipulate your assets for tax efficiency and maximum wealth for both you and your heirs
  • A detailed description of what you want to happen when you die — a plan for your internment and for the disbursement of your assets and property.
  • Instructions for what you would like to happen if you are living but cannot care for or make decisions for yourself

Explore the 11 documents you need for a reliable estate plan.

10. You Have a Dream and a Purpose

Young woman with piggybank daydreaming.
Africa Studio / Shutterstock.com

Without a plan for life after retirement, many retirees find themselves feeling vaguely unfulfilled and restless, craving something more but not knowing what that something might be. Focusing on the financial aspects of retirement is important, but the personal side of your retirement plan is just as important, and could ultimately guide how you use your retirement assets.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Americans’ Top 7 Retirement Priorities for Biden and Congress

President Joseph Biden
Christos S / Shutterstock.com

With a new president and Congress sworn in, many Americans are wondering what’s next — and how policies of the new administration will impact them.

When it comes to retirement, Americans have a few priorities they’d like to see policymakers address.

The 20th Annual Transamerica Retirement Survey of Workers asked about retirement financial security issues to determine which issues workers consider their highest priorities for the new president and Congress. These topped the list.

7. Increase access to affordable housing

anek.soowannaphoom / Shutterstock.com

Workers who think this should be a priority: 34%

The U.S. is facing a housing affordability crisis, according to a Harvard study sponsored by Habitat for Humanity. The study found that more than 37 million households were “housing cost-burdened” — meaning they spent more than 30% of their income on housing.

More than 17 million were “severely cost-burdened” — spending more than half their income on housing. Finding affordable housing in retirement is an important part of survival.

6. Add financial literacy to school curriculums

Monkey Business Images / Shutterstock.com

Workers who think this should be a priority: 34%

Workers believe that educating Americans early about personal finance issues could help them make better decisions later in life. In fact, a survey from the National Foundation for Credit Counseling (NFCC) reports that 78% of U.S. adults believe they could benefit from financial advice from a professional.

The National Endowment for Financial Education (NEFE) asserts that financial literacy education can help improve Americans’ financial outcomes, and that might be one way for future generations to improve their retirement prospects.

5. Increase access to workplace retirement plans

Myvisuals / Shutterstock.com

Workers who think this should be a priority: 36%

According to a brief prepared by the Congressional Research Service, 71% of workers have access to a retirement plan, but there’s only 55% participation. Among those who do participate, those with lower incomes get a smaller practical tax benefit than those with higher incomes.

Biden proposes “equalizing” the tax benefits of participation, as well as increasing tax benefits to small businesses that offer retirement plans. On top of that, Biden’s proposals include an “automatic 401(k)” for those without access to workplace retirement plans.

4. Make long-term care more affordable

Nursing Home
Photographee.eu / Shutterstock.com

Workers who think this should be a priority: 37%

Depending on the type of long-term care you need, it can cost more than $7,000 per month for a private room in a nursing home, according to the U.S. Department of Health and Human Services. Medicare doesn’t cover long-term care costs, making it difficult for retirees to pay for such care.

As a result, the respondents to the Transamerica survey are interested in having Biden and Congress innovate solutions to make long-term care services more affordable for more people.

3. Address Medicare funding shortfalls

Doctor examining a senior patient
didesign021 / Shutterstock.com

Workers who think this should be a priority: 42%

Medicare premiums and out-of-pocket costs can stress seniors’ finances big time. However, future costs to retirees could be even greater, as Medicare’s finances continue to deteriorate. According to the Social Security Administration, Medicare faces long-term financing shortfalls. With this in mind, respondents to the Transamerica survey are interested in shoring up Medicare funding.

One of Biden’s proposals, lowering the eligible age for Medicare, faces a tough battle in Congress, according to CNBC. While such a move would expand access to health care for those 60 and older, it might not address the funding shortfall.

2. Make health care more affordable

Woman with surprise medical bill
Antonio Guillem / Shutterstock.com

Workers who think this should be a priority: 47%

Health care costs continue to rise, with the Centers for Medicare and Medicaid Services reporting that private health insurance spending grew 3.7% in 2019. On top of that, out-of-pocket spending on health care grew 4.6% in 2019. With national health expenditures projected to grow at a healthy clip, it’s not a surprise that the Transamerica respondents are concerned about affordable health care.

So far, Biden has directed the insurance exchanges created by the Affordable Care Act to be open for a special enrollment period for three months (through May 15). The Kaiser Family Foundation estimates that, through the exchanges, as many as 4 million people could get a plan at no cost to them and an additional 4.9 million could get reduced-cost plans. Biden has promised to protect and build on the Affordable Care Act in an effort to reduce Americans’ health care costs.

1. Address Social Security funding shortfalls

Social Security payments
Steve Heap / Shutterstock.com

Workers who think this should be a priority: 49%

The top priority for American workers is addressing the stability of the Social Security system, according to the Transamerica survey. Respondents want Social Security benefits to be available in the future, and concerns about funding issues continue to weigh on the program.

When it comes to addressing a projected shortfall, Biden has proposed raising payroll taxes for those with more than $400,000 in earnings. In 2021, payroll taxes are limited to only a worker’s first $142,800 in earnings. Biden’s proposal would levy new payroll taxes on earnings above $400,000.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

Americans’ Top 7 Retirement Priorities for Biden and Congress

President Joseph Biden
Christos S / Shutterstock.com

With a new president and Congress sworn in, many Americans are wondering what’s next — and how policies of the new administration will impact them.

When it comes to retirement, Americans have a few priorities they’d like to see policymakers address.

The 20th Annual Transamerica Retirement Survey of Workers asked about retirement financial security issues to determine which issues workers consider their highest priorities for the new president and Congress. These topped the list.

7. Increase access to affordable housing

anek.soowannaphoom / Shutterstock.com

Workers who think this should be a priority: 34%

The U.S. is facing a housing affordability crisis, according to a Harvard study sponsored by Habitat for Humanity. The study found that more than 37 million households were “housing cost-burdened” — meaning they spent more than 30% of their income on housing.

More than 17 million were “severely cost-burdened” — spending more than half their income on housing. Finding affordable housing in retirement is an important part of survival.

6. Add financial literacy to school curriculums

Monkey Business Images / Shutterstock.com

Workers who think this should be a priority: 34%

Workers believe that educating Americans early about personal finance issues could help them make better decisions later in life. In fact, a survey from the National Foundation for Credit Counseling (NFCC) reports that 78% of U.S. adults believe they could benefit from financial advice from a professional.

The National Endowment for Financial Education (NEFE) asserts that financial literacy education can help improve Americans’ financial outcomes, and that might be one way for future generations to improve their retirement prospects.

5. Increase access to workplace retirement plans

Myvisuals / Shutterstock.com

Workers who think this should be a priority: 36%

According to a brief prepared by the Congressional Research Service, 71% of workers have access to a retirement plan, but there’s only 55% participation. Among those who do participate, those with lower incomes get a smaller practical tax benefit than those with higher incomes.

Biden proposes “equalizing” the tax benefits of participation, as well as increasing tax benefits to small businesses that offer retirement plans. On top of that, Biden’s proposals include an “automatic 401(k)” for those without access to workplace retirement plans.

4. Make long-term care more affordable

Nursing Home
Photographee.eu / Shutterstock.com

Workers who think this should be a priority: 37%

Depending on the type of long-term care you need, it can cost more than $7,000 per month for a private room in a nursing home, according to the U.S. Department of Health and Human Services. Medicare doesn’t cover long-term care costs, making it difficult for retirees to pay for such care.

As a result, the respondents to the Transamerica survey are interested in having Biden and Congress innovate solutions to make long-term care services more affordable for more people.

3. Address Medicare funding shortfalls

Doctor examining a senior patient
didesign021 / Shutterstock.com

Workers who think this should be a priority: 42%

Medicare premiums and out-of-pocket costs can stress seniors’ finances big time. However, future costs to retirees could be even greater, as Medicare’s finances continue to deteriorate. According to the Social Security Administration, Medicare faces long-term financing shortfalls. With this in mind, respondents to the Transamerica survey are interested in shoring up Medicare funding.

One of Biden’s proposals, lowering the eligible age for Medicare, faces a tough battle in Congress, according to CNBC. While such a move would expand access to health care for those 60 and older, it might not address the funding shortfall.

2. Make health care more affordable

Woman with surprise medical bill
Antonio Guillem / Shutterstock.com

Workers who think this should be a priority: 47%

Health care costs continue to rise, with the Centers for Medicare and Medicaid Services reporting that private health insurance spending grew 3.7% in 2019. On top of that, out-of-pocket spending on health care grew 4.6% in 2019. With national health expenditures projected to grow at a healthy clip, it’s not a surprise that the Transamerica respondents are concerned about affordable health care.

So far, Biden has directed the insurance exchanges created by the Affordable Care Act to be open for a special enrollment period for three months (through May 15). The Kaiser Family Foundation estimates that, through the exchanges, as many as 4 million people could get a plan at no cost to them and an additional 4.9 million could get reduced-cost plans. Biden has promised to protect and build on the Affordable Care Act in an effort to reduce Americans’ health care costs.

1. Address Social Security funding shortfalls

Social Security payments
Steve Heap / Shutterstock.com

Workers who think this should be a priority: 49%

The top priority for American workers is addressing the stability of the Social Security system, according to the Transamerica survey. Respondents want Social Security benefits to be available in the future, and concerns about funding issues continue to weigh on the program.

When it comes to addressing a projected shortfall, Biden has proposed raising payroll taxes for those with more than $400,000 in earnings. In 2021, payroll taxes are limited to only a worker’s first $142,800 in earnings. Biden’s proposal would levy new payroll taxes on earnings above $400,000.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com

10 Things Taxes Pay For: Where Do Your Federal Tax Dollars Go?

Your taxes pay for a variety of government services, as well as government debt and salaries.

A young Black woman sits at a desktop computer and looks intently at the screen. One hand rests on the keyboard and the other holds a mug of coffee or tea. There is a yellow wall and blackboard behind her and two notebooks stacked on the desk beside her.

The federal government spends a lot of money. In 2019, for example, the government spent a total of around $4.4 trillion. You know that sounds like a lot, but how much is it really? 

For comparison, $4.4 trillion was around a fifth of the total national GDP for that year. GDP, or gross domestic product, is the value of all the goods and services provided or made within the country during that year.

What funds the things the government pays for? Well, $3.5 trillion of that spending was paid for by “federal revenues,” which mostly refers to taxes. The other $984 billion was borrowed. Discover 10 things taxes pay for below to understand just how the federal government is spending those trillions of dollars.

10 Things Taxes Pay For

  1. Government Debt
  2. Social Security
  3. Medicare
  4. Other Health Care
  5. National Defense
  6. Veterans Benefits
  7. Safety Net Programs
  8. Education
  9. Infrastructure
  10. Salaries and Wages

1. Government Debt

If the United States’ government borrowed more than $900 billion in 2019 alone, you can bet the total debt is high. At the end of 2019, it was $22.8 trillion.

According to the Peter G. Peterson Foundation, which keeps a daily national debt clock, as of February 24, 2021, the national debt was as much as $27,932,601,755,468—more than $27.9 trillion. Not sure exactly how much that really is? Consider this—if everyone in the United States covered an equal portion of that debt, each person would need to pony up $84,029.

It’s not surprising that a large chunk of what the federal government spends goes to debt, then. In 2019, around 8% of federal spending covered only the interest on debts!

2. Social Security 

Funding the Social Security program is a big expense for federal taxpayers. Social Security spending is part of an overall government spending category known as mandatory spending. These don’t require appropriation because the spending is mandated by a previous law or appropriation. With mandatory spending, the government funds the programs based on the need—however many people are eligible for and draw from Social Security, for example, determines how much is funded.

Many of the mandatory spending programs started in the middle of the 20th century. As the population has grown, so has the amount needed to fund these programs. In 1962, mandatory spending accounted for 31% of the federal budget. In 2019, it accounted for 61%.

Social Security accounts for the largest amount of mandatory spending. In 2019, the program accounted for 38% of all mandatory federal spending. That was around 23% of the total budget, or about a trillion dollars.

3. Medicare

Medicare also represents a mandatory spending item on the federal budget. It’s typically second to Social Security, and in 2019, it accounted for more than 23% of mandatory spending. This program provides health care benefits for qualified retired individuals as well as some eligible disabled persons. Overall, about $651 billion went to Medicare in 2019.

4. Other Health Care

Medicare isn’t the only health care and wellness program covered by the federal government. Others include Medicaid, which the federal government funds in partnership with the states, the Children’s Health Insurance Program (CHIP), and health care market subsidies. These subsidies are funded under the Affordable Care Act and usually taken as a reduction on how much someone might pay in taxes.

In 2019, all of these other health care programs cost around $450 billion.

5. National Defense

Defense is not included in mandatory spending. It is discretionary spending and it must be included in congressional appropriations bills annually.

Defense tends to be the biggest discretionary spending item on the federal budget. Some, but not all, foreign aid can be classified under defense because that spending is meant to stabilize other nations for the defense of the United States.

In 2019, defense accounted for around 50% of all discretionary spending. However, that was only around 16% of the total budget. 

6. Veterans Benefits

Veterans benefits refers to a wide range of health and wellness programs, financial assistance, and other programs designed to support veterans of the United States military. This type of spending can actually fall under both discretionary and mandatory, as there are VA programs in both categories. In either case, though, it’s a relatively small percentage of total spending.

7. Income Security or Safety Net Programs

Income security refers to federal spending on safety net programs to increase the health and safety of the general population. Programs included under this umbrella term cover, but aren’t limited to, housing assistance, nutrition and food assistance, unemployment compensation, foster care, and certain tax credits.

In 2019, income security accounted for the third-largest mandatory spending category after Social Security and Medicare. Around 16% of mandatory federal spending was in this category. Around 5% of discretionary spending that year was also in this category.

With two COVID relief acts in 2020, you should expect to see percentages in this category go up for that year. The types of spending related to those bills—such as the stimulus payments to qualifying Americans—would be considered income security. 

8. Education

The children are our future—but you might not know it by looking at how federal funds are spent. Education is normally a relatively small discretionary spending item (about 7% of discretionary spending in 2019), and it often includes both K-12 education as well as spending on college, training, and employment services. It’s also worth noting that only around 8% of K-12 public school spending across the country is federal. The rest is covered by state and local funds. 

9. Infrastructure

Infrastructure refers to physical structures and facilities that we depend on to function as a society. This includes buildings, roads, and power supplies. 

As with education, infrastructure expenses are shared among federal, state, and local budgets. According to a report from the House Committee on the Budget, the total infrastructure spending across all these entities in 2017 was only 2.3% of GDP, or around $441 billion.

10. Salaries and Wages

Not including the military and other non-civilian workforces, the federal government employs more than 2 million people. That’s a lot of people to pay, which means a lot of spending on salaries, wages, and benefits. The federal government spends billions of tax dollars to cover these expenses every year.

What If You Don’t Agree with Federal Spending?

As much as we’d sometimes like to pull the plug on our own tax bills because we don’t agree with how the federal government is spending our money, you still need to pay your taxes. Not doing so has legal consequences and could also lead to debt that might derail your financial goals and credit score. 

But you can take some actions if you don’t agree with how the federal government is spending your tax dollars:

  • Contact your legislators. Find your representatives in the House of Representatives and the Senate, then contact them about your concerns. Don’t forget to contact your state representatives as well as your US representatives.
  • Use your vote. Vote for candidates for president, the House of Representatives, or the Senate who align most closely with your policy beliefs and who may be more likely to spend money in a way you agree with.
  • Get involved. Learn more, get involved with grassroots change efforts, or sign or create petitions for change.

But while you’re doing all those things, don’t forget to do your federal taxes.

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7 Ways Americans Plan to Ensure a Financially Secure Retirement

Older couple with financial planner
EdBockStock / Shutterstock.com

A secure retirement is in your hands — and nobody else’s.

For better or worse, we all have to finance our own retirement. Sure, Social Security and Medicare will help. But workplace pensions are rare, and few will inherit fortunes from their parents, or anyone else.

Fortunately, many Americans understand and accept this reality. They are taking steps long before retirement to make sure they will not struggle financially during their post-work years.

Recently, the National Institute on Retirement Security asked 1,200 people 25 and older what they are doing to ensure a financially secure retirement. Below are the methods they cited most often.

7. Seek work in retirement

Senior worker
gpointstudio / Shutterstock.com

Respondents who plan to do this to ensure a financially secure retirement: 39%

When the chips are down and you need more cash, nothing tops working and earning a regular income. It is the single most effective way to quickly add to your bottom line.

The survey respondents clearly understand that fact. Few of us want to work a full-time job in retirement — we gave up the 9-to-5 for a reason, after all. But there are plenty of opportunities to earn part-time income that can make a crucial difference in retirement.

For more, check out “20 Great Part-Time Jobs for Retirees.”

6. Save about 5% more than you currently do

Woman with piggy bank
Jason Stitt / Shutterstock.com

Respondents who plan to do this to ensure a financially secure retirement: 40%

Most of us find it difficult to save as much as we do now, let alone 5% more. But saving just a bit extra can make an enormous difference, especially if you do it for many years and invest the money well.

If the thought of saving more scares you, we can relate. Maybe it’s time to sit down with a financial pro who can help you craft a savings and investment strategy that will pay a lifetime of dividends. Stop by Money Talks News’ Solutions Center and search for a fee-only financial planner who can offer expert advice.

5. Delay claiming Social Security

Social Security payments
Steve Heap / Shutterstock.com

Respondents who plan to do this to ensure a financially secure retirement: 41%

As we have pointed out, sometimes it does not pay to delay applying for Social Security benefits. But in other cases, waiting to file can be one of the smartest financial decisions you will ever make.

For every year you wait to claim past your full retirement age, your benefit will grow by as much as 8%. That is tough to beat.

For many people, this decision — to delay or not to delay — is a vexing one. If you need help, stop by Money Talks News’ Solutions Center and check into working with Social Security Choices, a company that can help you determine when is the best time to claim given your personal situation.

3. Save about 1% to 4% more than currently (tie)

Photo (cc) by American Advisors Group

Respondents who plan to do this to ensure a financially secure retirement: 48%

Remember that notion of saving 5% more? If that is too intimidating a challenge, don’t be afraid to take a more modest approach, like saving 1% to 4% more.

At Money Talks News, we believe that saving a little over a long period of time can add up to big things. It’s a gospel we preach because many of us have lived it out and have seen the power of this strategy up close. The survey respondents apparently agree.

For more tips on getting started saving, read “The 7 Fastest Ways to Catch Up on Retirement Savings.”

3. Cut back spending once retired (tie)

saving money
Dean Drobot / Shutterstock.com

Respondents who plan to do this to ensure a financially secure retirement: 48%

Those who need more cash but don’t want to work have one option left: to spend less.

This is often easier said than done. But if you find ways to trim back expenses, you open up more breathing room in your budget.

One way to spend less during your golden years is to retire in a place where the cost of living is lower. Money Talks News founder Stacy Johnson discussed some options in a recent podcast, “5 Countries Where You Can Retire on $2,000 a Month or Less.”

2. Cut back current spending

A surprised man looks at his empty wallet in shock
ToffeePhoto / Shutterstock.com

Respondents who plan to do this to ensure a financially secure retirement: 55%

Cutting back on spending in retirement can be painful. It’s a lot easier to trim your budget now, while you are still working and have a steady income.

Trim your sails today, and you will have more money to invest in a nest egg that will see you through your golden years. Creating a budget can help you find places to cut expenses.

Some people find budgeting to be a pain, but Money Talks News partner YNAB (short for “You Need A Budget”) makes the process easy. The YNAB app helps you track day-to-day expenses, prepare for unexpected costs and build savings.

You can even connect the program directly to your bank and credit card accounts, which allows you to download transactions to YNAB automatically so you don’t have to manually enter them one by one.

For more, check out “An Easy Way to Track Your Spending and Build Your Savings.”

1. Stay in your current job as long as possible

Senior at a computer
Stocklite / Shutterstock.com

Respondents who plan to do this to ensure a financially secure retirement: 60%

Even if you really want to retire soon — like yesterday — sometimes it simply makes more sense to stick with that job a little longer.

The survey respondents are clearly a tough-minded, clear-eyed bunch. A full 60% say they plan to work as long as possible to ensure they have a secure retirement.

It is a great idea — tough to beat, actually. But it is not always practical. Gallup polling has found that the average age at which workers retire is a fairly young 61. Sometimes unexpected life changes or health problems can prevent you from working as long as you planned.

So, if you are working today, remember that now is the best time to save and to create a plan for that dream retirement down the road.

Disclosure: The information you read here is always objective. However, we sometimes receive compensation when you click links within our stories.

Source: moneytalksnews.com