As people live longer, thanks to better health and medical advances, it’s vital to plan finances for a longer life. This guide simplifies the steps to ensure your money lasts as long as you do, covering topics like when to retire, managing inflation, saving more, investing wisely, preparing for healthcare costs, estate planning, and flexible retirement options.
Rethinking When to Retire
Traditionally, retirement starts at 65, but with longer lives, it might be wise to delay it. Working longer, even part-time, can help grow savings and prevent running out of money.
Tackling Inflation in Your Finances
Inflation decreases money’s value over time, so plan for your future expenses to cost more. A good rule is to account for a 3% annual inflation rate to ensure your savings last.
Boosting Your Savings
To deal with future costs, try to save 15% to 20% of your income, higher than the usual 10% suggestion. Keep an emergency fund and track your spending to find more ways to save.
Diversifying Your Investments
As you get older, balance your investments to protect and grow your wealth. Mix up your investments in stocks, bonds, real estate, and others to lower risk and potentially increase returns.
Preparing for Healthcare Costs
Healthcare expenses typically rise as you age. Consider long-term care insurance and health savings accounts (HSAs) to manage these costs without hurting your savings.
Estate Planning for Your Legacy
With longer lives, it’s important to plan how your assets will be passed on. Work with an attorney to draft a will, set up trusts, and decide on beneficiaries to ensure your wishes are followed and taxes for your heirs are minimized.
Adopting a Flexible Retirement
Instead of a fixed retirement age, stay open to working part-time or trying new roles. This flexibility can help your savings last longer and keep you engaged and fulfilled.
Planning for a longer life means adjusting your financial strategies. Consider when to retire, how inflation affects you, ways to save more, investment diversification, healthcare planning, estate arrangements, and a flexible approach to retirement. Seeking advice from a financial advisor can also be beneficial. We can help you to start planning now to make the most of your longer life.
