Postpone claiming Social Security as long as possible
A worker can claim Social Security benefits as early as age 62, but those benefits will be reduced for good. On the other hand, if you wait until you reach your full retirement age (calculated based on your year of birth) or longer, you will collect the biggest Social Security checks.
For instance, if you were born in 1960 and decide to leave the workforce at 62, your monthly check would be reduced by 30 percent, compared to retiring when you turn 67, your full retirement age. In numbers, if your full retirement benefit was $2,000, you’d be getting $1,400. If you can afford to delay collecting your Social Security checks past your full retirement age, you can only do so until you reach 70, when you have to start drawing Social Security.
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Invest in long-term care insurance
Long-term care insurance is a useful tool in protecting your retirement funds. You might have built a good-sized nest egg to cover your living costs in retirement, but all that hard-saved money, or most of it, anyway, could disappear in an instant of you’ll need long-term care. Nobody wants to pay premiums long before they need it, but those premiums could more than double when you’re older, therefore it’s best to secure a long-term care insurance when you are in relatively good health. According to financial specialists, it should be by age 60 to 65 or five years earlier in the case of couples.
The cost of long-term care could devastate your financial plan for retirement. According to Genworth’s 2019 Cost of Care Survey, the average cost for assisted living in the United States is about $4,000 per month or $48,000 per year. The price for a room in a private nursing facility could go as high as $8,517 per month. Need we stress the importance of long-term care insurance more? Then, check out these 11 Essential Facts About Assisted Living You Need to Know.
