In the United States, turning 65 years of age is a milestone on many levels. Before this milestone birthday, there is a hefty checklist to review before you continue to age successfully. The most crucial thing on that to-do list before turning 65? In our humble opinion, it would be to review options and craft the best strategy for the well-being of your health and financial security.
Consider questions like:
- Can you afford to retire?
- Are you married?
- Do you want to maintain a certain lifestyle?
- Do you still have a mortgage?
Next, estimate your total annual spending. Include a cushion for periodic or unforeseen expenses (think home repairs or dental work). Total all of your potential retirement-income sources and understand the tax implications associated with their spending. Run through several scenarios where you change what year you claim social security benefits to see if you should defer collecting it to a later age. Be realistic and start adhering to a modest budget today.
Very few Americans can withdraw from personal savings and investments without risking running out of money too soon. As you start to review your retirement plan, find a qualified retirement planning expert that can help you with projections that are based on realistic assumptions.
Then you'll want to familiarize yourself with program variations of Medicare. If you are retiring, you will approach Medicare differently than if you are continuing to work and have healthcare available through your employer. If you will no longer have healthcare through an employer, explore a supplemental insurance policy like Medigap.
Health insurance becomes quite complicated and varies widely depending on your overall health and personal financial situation. The National Council on Aging (NCOA), in partnership with private companies Aon Retiree Health Exchange™ and Via Benefits™, provides a checklist and timeline that can usher you through the process of enrolling in Medicare. these options help assess how you will cover the cost of prescription medication too. If you have a lower income, you may qualify to enroll in Medicaid, which covers more expenses than Medicare. If you have already begun to take your social security benefits, then you will automatically be enrolled in Medicare. A packet entitled “Welcome to Medicare” will be sent to your address three months before turning 65. There are essential actions to take and deadlines associated with this packet, so read through the material carefully and be prepared to meet those deadlines.
As you approach the age of 65 many private insurance companies will lobby for your dollars. Should you decide to spend money on the supplemental insurance they offer, be sure you're using an insurance broker that can sell you policies from many different insurance companies (almost like a consortium). This gives you more options beyond a solo group that will only sell plans that associated with their company. A reputable insurance broker should not charge for helping you to assess your situation as they make commissions from the insurance company providing the policy to you. Check with the Better Business Bureau (BBB) online where you can enter the name of an insurance group or retirement counselor and find out how long they have been in business, their accreditation, BBB rating, customer reviews, and any complaints.
If you are age of 50 or older, you can contribute an extra $1,000 annually to your IRA and an additional $6,000 to a 401(k)s up until the age of 65, according to Investopedia. If you are still working, this is an excellent way to boost your retirement spending money. Before age 65, you should explore the option of a long-term care insurance policy, which helps to pay for any assisted living care needs you may require in the future. Long-term care policies can be expensive. If you do not enroll in a long-term care plan before the age of 65, the policies will become practically unaffordable.
Before turning 65, you should also give thought to a will or trust, power of attorney, healthcare proxy, etc. Take heart, turning 65 is far from a death sentence. Many Americans are living long and active lives well beyond the age of 65; however, meeting with an elder law attorney can save you and your heirs plenty of money and heartache. Do not wait until an adverse medical event forces your family or loved one to act on your behalf financially or medically. Decisions made under duress do not provide the best outcomes.
Considering a dementia directive is wise as well. Projections for the aging U.S. population indicate an ever-increasing number of seniors who have Alzheimer's and other forms of dementia. Your elder law attorney can guide you through your options. Some states even have working templates for dementia directives. As you age, you can review your legal strategies from time to time and make adjustments as you deem necessary. It isn't easy to discuss your end of life scenario, but once you have had the discussions and put proper legal documents into place, you can move forward with a sense of relief. It is freeing to make decisions and act on your future behalf, knowing you can always revisit your choices.
Now onto the fun stuff; get excited about the senior discount! While it is true that there are discounts available as early asage 55 and 62, nothing beats the senior discount at age 65. You can check off that bucket list of yours with deals on restaurant meals and travel excursions, clubs, retail stores, hotels, cinemas, smartphone plans, AARP membership discounts, and more. If you do not see a senior discount posted, by all means, ask.
Beyond Medicare eligibility, you can get a one-time free physical exam if you have Medicare Part B insurance coverage. Gyms and community programs offer discounted or free physical fitness programs so that you can keep yourself moving and as healthy as possible. If you have Medicare, check out your eligibility for SilverSneakers for an age 65+ fitness program. Your local senior center can keep you socially active and connected to people your age. Making friends and enjoying the simple act of conversation is known to have many benefits for your cognition and staves off isolation and depression issues.
If you retire from your job at age 65, you can finally begin to collect on your pension plan or 401(k). That in itself is worth a celebration after many decades of hard work. You might also opt to collect your social security benefits, however it is generally advised you wait until you reach full retirement age.
Homestead Benefits and property tax exemptions are a considerable benefit for those who already own or plan to own a home or property. Benefits vary by state, so you will need to see what you can qualify for where you live. Your local comptrollers' office can provide information about offers regarding homestead benefits. For property tax exemptions, you must contact your local comptroller or tax assessor's office for exemption information.
There is plenty to discover, learn, and know about how to proceed in life at age 65 and beyond. With Social Security benefit determinations, health insurance policies, and legal documents in order, you can begin to enjoy what lies ahead. Contact our Fishers, Ind., office by calling (317) 863-2030 for assistance with your planning needs along the way.