Seniors today have a greater life expectancy than in past years, allowing parents and grandparents to enjoy long retirement years with friends and family. While most of us strive to live a long and healthy life, it’s important to remember that age can bring about financial hardship, especially for seniors with no active source of income.
Older Americans with a longer life expectancy are more susceptible to the rising cost of housing, insurance, and will end up needing more medical services over time. The U.S. Department of Health and Human Services estimates that at least 7 in 10 seniors over the age of 65 will require long-term care services at some point during their lives. According to the Genworth Cost of Care Survey, care costs are expected to rise over the next five years, with permanent care home residents projected to pay an annual national median of more than $96,000 by 2021.
Pension systems in place now are already having trouble supporting growing numbers of retirees who need help staying afloat as they age. Seniors can’t rely on overburdened by benefits systems such as Medicare to take care of their financial needs in old age. Beyond staying fit and eating right, there are several things that seniors can do to prepare financially for a long and happy retirement.
Social Security Benefits
You don’t have to take out your social security benefits the instant that you retire, especially if you already have the means to support yourself comfortably. Bydelaying your benefits, you may entitle yourself to more money later on. If you start receiving monthly payouts at age 66, you’ll receive 100% of your retirement benefits, but this number increases as you wait. Retirees who hold their social security benefits until age 67 get 108% of monthly benefits, while those 70 and over receive an impressive 132%.
Annuities offer regular payouts on a monthly or annual basis, giving recipients a regular income to fund their daily living expenses. Many employers offer retirement plans that include either lump cash sums or annuities, which can end up paying out more over the course of a lifetime. Retirees can also purchase life annuities, where you pay a lump sum and receive regular payments years later when your savings might be depleted. Life annuities can be a lifesaver for seniors who live longer than their budget takes into account.
If you have a life insurance policy, you may be able to cash it out through a life settlement to pad your retirement or savings fund. This can help to cover medical and long-term care costs for seniors who are struggling to pay. Many policies require seniors to meet certain criteria before taking out a life settlement, including conditions such as no changes in health and low-value premiums.