Most people believe that senior citizens are happy to be retired and blow through their finances once they do. They go on around-the-world trips and spend all of their time indulging in hobbies. The truth is that many retirees go through a stressful and sometimes depressing transition period, since they are going abruptly from a lifetime of working to doing nothing.
Also, most senior citizens live on extremely fixed incomes. Many have to become semi-retired just to keep up with the standards of living. Since there are many misconceptions about the finances of senior citizens, here are a few more.
You Need $1 Million to Retire Comfortably
There is a general rule of thumb concerning the finances of retirement that is often used by financial analysts. All that one needs is a million dollars to retire comfortably. The truth is that the magic $1 million-dollar retirement number is an arbitrary figure. How much money you require for retirement is a custom number that is calculated from your own life circumstances.
Retirement savings are supposed to last throughout your retirement. A person can live a few years or two or three decades past the age of 65 on the average. If you live in a budget-conscious city and manage your standard of living finances accordingly, you might be able to live on $1 million dollars.
The average senior citizen needs at least $44,000 to meet their annual standard of living needs. It can cost over $280,000 to pay for health care from the age of 65 until death. The annual standard of living in Saint Petersburg, Florida is about $43,000 a year. That amounts to $860,000 over a 20-year period. When you add in medical costs, you can see how far $1 million dollars can go.
The key to retirement is living somewhere with a low standard of living. To keep expenses down. To amass a custom retirement savings amount based on a preferred lifestyle. And, to accept the need to re-enter the workforce if needed to supplement existing saving.
Medicare Pays For All Medical Needs
Medicare is a government-sponsored medical insurance aid program. If you have worked all of your life and paid taxes, you are eligible for Medicare. Even if you haven’t worked or paid a lot in taxes, you can be eligible for Medicare. Yet, there are gaps in coverage. There is a Medicare A, B, C, and D and various supplemental programs. Medicare recipients have to pay $100 to $400 a month in premiums on the average.
Medicare just isn’t designed to pay for all medical expenses throughout elderly age. As many senior citizens live on fixed incomes, they must depend on a variety of financial sources to help them pay for their medical expenses. Like social security benefits, the cash value from a senior life insurance policies, income from work, and so on.
Most Senior Citizens Have Prepared For Their Funerals
Over half of all Americans have less than $1,000 saved for their future retirement needs. Well over 76% of Baby Boomers feel they don’t have enough money saved for retirement. Over 40% of people don’t have any life insurance at all. About 7% of senior citizens declare bankruptcy every year. Over 46% of people retiree from work involuntarily due to health or for personal reasons.
These statistics do indeed follow a trend. Accordingly, only about 21% of people ever make plans for their own funerals. Or, coordinate plans with loved one to make sure such plans are carried through posthumously. The truth of the matter is that confronting one’s mortality is a hard thing to do, whether you are young or elderly.
While it is difficult, one of the most efficient things one can do is apply for burial insurance. It is easy to acquire, most senior citizens are accepted over the phone, and it is affordable. It is a form of basic health insurance that is designed to cover funeral expenses only.
Managing Finances Can Be Difficult At Any Age
The truth is that for a person of any age, the costs of the standard of living must be met. It doesn’t get any easier, whether you are in your 20s or 60s.