According to the AARP Life Insurance Company, “For more than 100 years, AARP has been committed to improving the quality of life for people over the age of 50.” The AARP helps seniors live longer and better by providing insurance that protects families and helps those who need it. The AARP Get a Grip program, which includes a monthly quote, is an excellent way to get started.
“AARP Life Insurance is a federally insured life and health insurance plan that helps protect and save for your financial future.” As you may have heard, one way to save for your future is to start an AARP Life Insurance for Seniors blog. Since AARP and its members take such great care of their members, why not make sure that other people who are in need are taken care of too?
3 money moves to make in your 60s
Those approaching retirement have many factors to consider, but by making some financial decisions early on, you can protect yourself from the risks that lie ahead. Start thinking about long-term care, health insurance, and retirement expenses before you say goodbye to your working years.
According to the US Department of Health and Human Services, 70% of Americans will need some form of long-term care in retirement, with an average annual cost of more than $100,000. The big question right now isn’t it is whether a retiree will experience a long-term care need, but how they will pay for the care they need.
Long term care insurance
Long-term care insurance can help supplement some or all of the long-term care expenses that Americans incur today. Long-term care insurance typically offers a daily coverage amount up to a maximum annual coverage. This daily benefit may cover skilled nursing facility care, which may otherwise be too costly.
For Americans looking to bridge the gap between their savings and long-term care needs, long-term care insurance is an attractive option, but it comes at a price. Because risk groups now expect a high percentage of Americans to have long-term care needs, the price of long-term care insurance can be prohibitive. However, according to AARP, healthy Americans ages 60 to 65 are at the optimal age to purchase long-term care insurance, due to the combination of affordable monthly premiums and total premium savings over the life of the insured. Buying this coverage today can help cover the unexpected costs of a long-term care stay.
Make a health plan
When it comes to planning for retirement, one of the biggest hurdles has to do with health insurance coverage. For most Americans, retirement health insurance means qualifying for Medicare and purchasing a Medicare supplement plan. However, Medicare eligibility begins at age 65, so navigating the years between retirement and Medicare eligibility is an important consideration.
Before you leave your employer, understand your employee benefits. Few benefit plans allow employees to continue group health coverage after they leave work. COBRA coverage, however, can provide a buffer by offering at least 18 months of continuous coverage under an employer’s plan. It should be noted that continuation coverage under COBRA is often more expensive for an employee than their employer’s plan, since employers often subsidize the cost.
Another option to bridge the gap between retirement and age 65 is to purchase insurance on the open market. Purchasing this coverage is often not recommended, as premiums are likely to be high, especially for someone over the age of 60. People with pre-existing conditions may be denied outright.
When considering health insurance in retirement, bridging the gap between retirement and Medicare eligibility is often the most important consideration. Understanding your benefits, as well as those COBRA provides, is an important way to protect yourself against unexpected health expenses in retirement.
Employ a Bucket Strategy
As you near retirement, the ebbs and flows of the markets feel less like turmoil and more like a threat to your future standard of living. One way to remove volatility from your plan is to implement a bucket strategy in the early years of retirement.
The bucket strategy works like this: a retiree sets up two savings buckets, one long-term and one short-term. The short-term bucket funds a retiree’s lifestyle and contains two to four years of expenses, invested conservatively. The long-term segment contains the rest of the portfolio’s assets, but is invested more aggressively. In theory, the short-term segment is protected from market volatility, while the long-term segment captures market gains.
Because the average recession has lasted four years or less, the short-term bucket funds the retirement lifestyle while weathering any market downturn. An excellent option for creating a bucket strategy is to renew old retirement plans for IRAs, then invest accordingly.
Like long-term care and health insurance, planning ahead for retirement expenses can pay dividends down the road. Long-term care needs, health insurance expenses, market volatility. All of these things are out of our control. By strategizing today, you can plan for these scenarios and ensure they don’t negatively affect your retirement.
