Being prepared for end-of-life costs is an important piece of retirement planning as assisted living and long-term care account for the majority of expenses in our later years.
Learn more about assisted living costs and read our tips for becoming more fiscally fit for longevity in assisted living.
How to Be Fiscally Fit for Longevity in Assisted Living
According to the Genworth 2018 Cost of Care Survey, assisted living communities cost $45,000, while semi-private nursing homes cost $85,775 and private nursing homes cost just shy of $100,000, depending on the amenities and types of care needed.
How are you planning on financing assisted living costs like this?
Here are three steps that you can take to become more fiscally fit for longevity in assisted living:
1. Prepare and review your essential documents for retirement.
First and foremost, getting your essential legal documents in order is crucial for end-of-life preparation so that not only your healthcare wishes are honored, but your assets are also discussed. The planning involved with these documents will help you become more prepared for life’s unexpected surprises, such as an accident or illness. Many retirees are not prepared for medical emergencies and legal document preparation is not only a good exercise for preparation – it’s a necessary one.
Think about it: If you don’t get legal specifications handled in advance, there will be many legal hoops for your family that will not only be expensive but will also heighten emotion during an already intense time with end-of-life and healthcare costs. The reality is that not enough families are addressing the tough topic of managing money with cognitive decline that is inevitable with aging.
2. Prepare for a longer life than expected.
Life expectancy is increasing with today’s medical and technological advances, yet many people are not adjusting their planning to include income for a longer retirement.
According to an Investment News and Nationwide study, most seniors estimate their retirement length at 22 years, but financial advisors think it’s prudent to tack 10 years onto that figure. According to the Stanford Center on Longevity, many people are “failing to adjust perceptions to current reality” in the following ways:
- Retirement expectations and the actual dollar amount of income needed are not consistent
- The actual age of retirement has increased and there is a considerable gap between retirement expectations and experience.
- The median “expected” retirement age is 65, the median “actual” age is 61
- There is a lack of knowledge around employment opportunities available for those who want to continue working
The “4% Retirement Rule” has long been the standard for retirement planning, but there needs to be a more diligent retirement portfolio plan to cover longer retirements today.
3. Use a professional fiduciary financial advisor to help plan your retirement portfolio.
Retirement planning and having a big enough nest egg are crucial for financial stability in retirement. Not only that but having a balanced portfolio with allocations that are right for where you are in life is important. For example, as retirement approaches, it’s important to make sure you re-assess your investment portfolio to minimize risk and strategize how your assets will serve as a regular, stable income so that you don’t outlive your assets. Assisted living and long-term health care costs are often much higher than retirees expect, which is why proactive financial planning really helps set you up for a successful retirement.
A financial advisor who is a fiduciary also offers many benefits to the client as a fiduciary is someone who is legally-and ethically-obligated to always put you first. Finding ways to boost your retirement income will help you develop a financial portfolio you will not only be proud of but will also greatly influence your financial success and quality of life in your golden years.
If you haven’t already done so, connect with an expert financial advisor to learn more ways to increase your retirement income through the right investments and planning.
What other suggestions do you have for staying fiscally fit for longevity in assisted living? We’d like to hear your tips in the comments below.