If you ask any middle-aged person, he or she will invariably tell you that time passes incredibly quickly. It can be surprising to come to the realization that your 50th birthday is waiting just over the horizon, because you still consider yourself to be young.
In a relative sense, a 50-year-old person is still young, but it is kind of late to initiate your retirement planning efforts. For most people, it takes a long-term, sustained effort to accumulate the resources that will be necessary to support a comfortable retirement.
If your place of employment is offering you the opportunity to participate in the 401(k) plan, you can look at this as a start. Taking advantage of any match that the employer may offer is huge, because this is nothing more or less than free money. When you are making steady contributions over decades, you may be pleasantly surprised when you look at the balance.
You can also make the most of your Social Security benefit. It is possible to begin to draw a benefit when you are as young as 62 years of age, but your benefit would be reduced by as much as 30 percent. Plus, you would be penalized if you earn a significant amount of income.
On the other hand, if you wait until you are eligible for your full benefit when you are between 66 and 67 years of age, you can earn unlimited income without experiencing any reduction in your monthly benefit. You can also choose to delay the application submission until you’re as old as 70. This would result in an increased benefit.
When you make the right choices over an extended period of time, you can enjoy your active retirement years to the utmost.
Looking Past the Active Years
People typically think about travel, golf, and leisure activities when they envision retirement activities. This is as it should be, but every prudent person should look past the active years, because there is a potential expense that looms large.
The majority of elders will someday need help with their day-to-day needs, and living assistance is very expensive. Medicare does not pay for long-term care, so this is a major wild card that enters the mix when you are creating a retirement budget.
Medicaid eligibility is a possibility, but you can’t qualify if you have significant assets in your own name. You are penalized if you give away assets shortly after you find out that you need long-term care, so that is not going to help in the near term.
There are things that you can do to effectively divest yourself of assets at the ideal time.
Retirement Planning Consultation
If you would like to discuss your retirement planning goals with a licensed professional, we would be glad to help. Our firm offers free consultations, and you can contact us through this page to set up an appointment: Indianapolis IN Elder Law Attorneys.
- How to Find the Right Caregiver for a Parent - September 27, 2022
- What You Need to Know about Elder Financial Exploitation - September 22, 2022
- Using a Letter of Instruction to Supplement Your Estate Plan - September 20, 2022