In the United States, turning 65 years of age is a milestone on many levels, but before this birthday, there is a hefty checklist that you need to address to age successfully. Of all the items on the list, the most important after your health is your financial well-being.
Can you afford to retire? Are you married? Estimate your total annual spending, including a cushion for periodic or unforeseen expenses like home repairs or dental work. Total all of your potential retirement-income sources and understand the tax implications associated with your spending. Run through several scenarios where you change what year you claim Social Security benefits to see if you should defer collecting to a later age. Be realistic and start adhering to a modest budget today. Very few Americans can withdraw a lot from personal savings and investments without risking running out of money too soon. As you start to gather your assessments in general about how you view your retirement, find a qualified retirement planning expert that can help you with projections that are based on realistic assumptions.
Familiarize yourself with Medicare and its associated program variations. If you are retiring, you will approach Medicare differently than if you continue to work and have health care available through an employer. If you won't have health care through an employer, learn about "Medigap" supplemental insurance policies, because Medicare will not cover all of your health care costs. Health insurance becomes quite complicated and varies widely depending on your overall health and personal financial situation. The National Council on Aging (NCOA), in partnership with private companies on Retiree Health Exchange™ and Via Benefits™, provides a checklist and timeline that can guide you through the process of enrolling in Medicare and assessing how you will cover the cost of prescription medication. If your income is low, you may qualify to enroll in Medicaid, which covers more expenses than Medicare. If you have already begun to take your Social
Security benefits, then you will automatically be enrolled in Medicare. A packet entitled “Welcome to Medicare” will be sent to your address three months before turning 65. There are essential actions to take and deadlines associated with this packet, so read through the material carefully and be sure to meet those deadlines.
There are resources available to help you understand what your options are and the best way for you to proceed. As you approach the age of 65, many private insurance companies will lobby for your insurance dollars that will be spent on supplemental insurance. Finding a retirement planning company with insurance brokers that can sell you policies from many different insurance companies is more advantageous than locking into a group that will only sell plans that are associated with that one company. A reputable insurance broker should not charge for helping you to assess your situation, as they make commissions from the insurance company providing the policy to you. Check the Better Business Bureau (BBB) web site, where you can plug in the name of an insurance group or retirement counselor to find out how long they have been in business, their accreditation, BBB rating, and customer reviews and complaints.
If you are over the age of 50, you can contribute an extra $1,000 annually to your IRAs and an additional $6,000 to 401(k)s until the age of 65, according to Kiplinger. If you are still working, this is an excellent way to boost your retirement spending money. Before 65, you should explore the option of a long-term care insurance policy, which helps to pay for any assisted living care needs you may require in the future. Long-term care policies can be expensive. If you do not enroll in a long-term care plan before the age of 65, the policies will become practically unaffordable.
Before turning 65, you should also come to terms with your will, advance health care directives, trusts, and the difficult conversation with your spouse or children about your end of life wishes and any funeral arrangements. Take heart, turning 65 is far from a death sentence; many Americans are living long and active lives well beyond the age of 65. Meeting with an elder attorney, however, can save you and your heirs' lots of money and heartache. Do not wait until an adverse medical event forces your family or a loved one to act on your behalf financially or medically. Decisions made under duress do not provide the best outcomes.
As you consider what to include in your advance health care directives, beware of the possibility of developing dementia. Projections for the aging US population indicate an ever-increasing number of seniors who have Alzheimer's Disease and other forms of dementia. An elder attorney can guide you through your options. Some states even have working templates for "dementia directives." As you age, you can review your legal strategies from time to time and make adjustments as you deem necessary. It isn't easy to discuss your end of life scenario, but once you have had the discussions and put proper legal documents into place, you can move forward with a sense of relief. It is freeing to make decisions about the future, knowing you can always revisit your choices.
Now for the fun stuff: get excited about the senior discount. While it is true that there are discounts available as early as 55 and 62, nothing beats the senior discount at age 65. You can check off that bucket list of yours with deals on restaurant meals and travel excursions, clubs, retail stores, hotels, cinemas, smart-phone plans, AARP membership discounts, and more. If you do not see an offering for a 65 senior discount posted, by all means, ask!
Beyond Medicare eligibility, you can get a one time free physical exam if you have Medicare Part B insurance coverage. Gyms and community programs offer discounted or free physical fitness programs so that you can keep yourself moving and as healthy as possible. If you have Medicare, check out your eligibility for SilverSneakers for a 65+ fitness program. Your local senior center can keep you socially active and connected to people your age. Making friends and enjoying the simple act of conversation is known to have many benefits for your cognition and staves off isolation and depression issues.
If you retire from your job at 65, you can finally begin to collect on your pension plan or 401(k). That in itself is worth a celebration after many decades of hard work. You might also opt to collect your Social Security benefits, but it is generally advisable to wait until you reach full retirement age.
Homestead benefits and property tax exemptions are a considerable benefit for those who already own or plan to own a home or property. Benefits vary by state, so you will need to see what you can qualify for where you live. Your local assessors' office can provide information about offers regarding homestead benefits. For property tax exemptions, contact your local tax assessor's office.
There is a lot to discover, learn, and know about how to proceed in life at age 65 and beyond. With Social Security benefit determinations, health insurance policies, and legal documents in order, you can begin to enjoy being 65. Start your education about being 65 or more today. Stay vibrant and healthy and enjoy those things you dreamed of doing when you were younger.
If you have any questions or need guidance in your planning or planning for a loved one, please do not hesitate to contact our Winthrop, Maine office by calling (207) 377-6966.