Getting older isn't easy. Aches and pains can start to pile up and linger longer than they used to. Making necessary choices about estate planning can cause people to confront their own mortality. And transitioning into retirement can pose some significant financial as well as psychological challenges.
But for seniors who have committed to a financial plan, aging into retirement also has some major perks. Here are four ways that growing older can go easy on your wallet.
1. Affordable health insurance
No, Medicare is not free. And there are several items it doesn't cover, including dental, vision, and long-term care. But for many seniors aged 65 and above, Medicare does a solid job of meeting your baseline health care needs at a relatively low cost.
One key to maximizing your Medicare benefit is to take advantage of all its services, including an annual wellness visit, mental health assessments, vaccinations, and preventative tests and screenings. Early detection is such an important part of managing your health and controlling your overall treatment costs.
Another key is to review your coverage every Fall during the Open Enrollment period. With very few exceptions, this is the one time during the year that you can change your Medicare plan to fit your current health care needs and your retirement budget. Even if you're happy with your current plan, it's important that you compare costs and coverages every year, especially if you or your spouse have an ongoing medical condition or significant prescription drug needs.
2. Continuing education
The pandemic has accelerated retirement among the baby boomers. According to Pew Research, more than 50% of U.S. adults aged 55 and older have left the workforce.
But are they going to stay on the sidelines for the rest of their lives?
Previous generations seemed to live a three-stage life: 20 years of school, 40 or so years of work, and then 20 or more years of retirement. Modern health care and nutrition are going to radically change that model for today's seniors. In the new multi-stage life, many of these able-bodied boomers might start looking for new challenges and start a whole new career that carries them well into their 80s.
To help seniors prepare for their second and third acts, many colleges and universities have started offering steep discounts for continuing education. Earning a new degree or certification could set you up for a lucrative new career without the hassles of student debt. And if you do plan on stepping away from the workforce for good once you retire, online or in-person classes are a great way to stimulate your mind and socialize with new people.
3. Senior shopping
Regular readers and listeners may remember that when I turned 50, the Keen Wealth team surprised me with a jumbo AARP card. I know that many seniors have a love/hate relationship with these kinds of programs. But getting older is nothing to be embarrassed about! Restaurants, retailers, grocery stores, theatres, museums, and mass transit all value your patronage. And once you’re living on a fixed income, saving a few bucks here and there can really add up. But if you really don't feel like showing an ID for smaller purchases, at least investigate senior discounts that could help you economize on a big bucket list item, like a dream vacation.
4. Compounding interest
Way back in 1999, a 68-year-old Warren Buffett spoke at Berkshire Hathaway's annual shareholders meeting about how he became a multibillionaire:
"I started building this little snowball at the top of a very long hill. The trick to have a very long hill is either starting very young or living to be very old."
Thanks to those longevity trends I mentioned above, today's seniors might be able to have it both ways. The sooner you start following a financial plan that allows you to live your preferred lifestyle while also securing you and your family for the long haul, the more those savings and investment contributions could grow. Maintaining that same balance as a retiree could potentially provide the means to build a significant legacy that could impact your family and your community for generations.
Do you need some help getting the most out of your money as you head into your Golden Years? Please don’t hesitate to contact my team at Keen Wealth and let's look for ways to strengthen the connection between your assets and your best life.
Bill Keen is a CHARTERED RETIREMENT PLANNING COUNSELOR℠ and independent financial advisor with more than 25 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he specializes in providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.
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