The Most Overlooked Retiree Concerns

In today’s post, we’re discussing my top 5 most overlooked retiree concerns – all which range from finances to health care to everything in between.

Retirement is undeniably a major life and financial transition.

Even so, retirees can run the risk of growing nonchalant about some of the financial challenges that retirement poses, for not all are immediately obvious.

In looking forward to their “second acts,” these retiree concerns may be overlooked. However, retirees can avoid these with the help of a thorough retirement strategy addressing these concerns.

Required Minimum Distributions (RMDs)

The Internal Revenue Service directs seniors to withdraw money from qualified retirement accounts after age 72.

This class of accounts includes traditional IRAs and employer-sponsored retirement plans. These drawdowns are officially termed Required Minimum Distributions (RMDs).  

Related: Required Minimum Distributions 101

Retirement Taxes

Speaking of RMDs, the income from an RMD is fully taxable and cannot be rolled over into a Roth IRA. The income is certainly a plus, but it may also send a retiree into a higher income tax bracket for the year.

Retirement does not necessarily imply reduced taxes.

While people may earn less in retirement than they once did, many forms of income are taxable: RMDs; investment income and dividends; most pensions; even a portion of Social Security income depending on a taxpayer’s total income and filing status.

Of course, once a mortgage is paid off, a retiree loses the chance to take the significant mortgage interest deduction.

Related: Taxes in Retirement: Most Asked Questions

Health Care Costs in Retirement

Those who retire in reasonably good health may not be inclined to think about health care crises, but they could occur sooner rather than later – and they could be costly.

A report by HealthView Services found that even with additional insurance coverages such as Medicare Part D, Medigap, and dental insurance, a healthy 65-year-old couple can expect to pay almost $208,000 out-of-pocket for their healthcare expenses.

Long Term Care Needs

Those who live longer or face health complications will probably need some long-term care. One month’s stay in a private room in a nursing home costs an average of $9,000 nationally, so it’s important to consider these when preparing for retirement.

Long-term care insurance is expensive, though, and can be difficult to obtain.

One other end-of-life expense many retirees overlook: funeral and burial costs. Preparing to address this expense may help surviving spouses and children.

Related: Our Free Guide to Long Term Care

Inflation and Rising consumer prices in Retirement

Historically, healthcare costs inflation has risen between 1.5-2 times the Consumer Price Index.

For a 65-year-old couple, this equates to an additional projected $85,917 in lifetime retirement healthcare costs.

Retirees would be wise to invest in a way that gives them the potential to keep up with increasing consumer costs.

Related: Inflation and Your Investments

As part of your preparation for retirement, give these retiree concerns some thought.

Enjoy the here and now, but recognize the potential for these factors to impact your financial future.

There are so many personal factors when it comes to preparing for your retirement. My goal is to help navigate and provide all the education I can to help you make the right decision for your personal circumstances.

If you need help sorting out what options would work for you and your family, please reach out to our office. We’re here to help you navigate what best suits your goals and personal circumstances and will help you find the best solution for you.