No matter how much you save for retirement, it always seems like it doesn’t hurt to sock away a little bit more. It’s understandable given how many people are living paycheck to paycheck. The Economic Policy Institute (EPI) recently found about half of Americans have nothing saved for retirement.
How to Make Retirement Less Stressful Financially
The whole process of retirement planning can be stressful, but taking control of your financial future is also empowering. Taking the time to create a comprehensive plan can go a long way in easing the financial stress of retirement.
Plan for Funeral Expenses
Funeral costs are probably the last thing anyone wants to think about as they near retirement. But when funeral services are needed, that’s not the time family members want to figure out the financial details.
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Burial insurance from a provider like PolicyZip can ease the financial stress. All of the related expenses are covered so there’s basically nothing to pay out-of-pocket. By planning ahead, you can finally put concerns about it behind you and focus on living retirement life to the fullest.
Take Advantage of Medicare Advantage Plans
Medical insurance is an expense everyone stresses over in retirement. The cost of healthcare continues to climb. Coverage through Medicare alone usually isn’t enough to cover all of your medical expenses in retirement. To ease the stress, include Medicare Part C, a Medicare Advantage plan, in your retirement budget.
Government-approved private insurers offer Medicare Advantage plans for an additional monthly premium. But you’ll also get more coverage. In addition to covering Medicare Part A and Medicare Part B, these plans also include extras like dental, vision and hearing. As we age these medical services become increasingly vital.
With all the Medicare parts covered you can stress less about medical expenses.
Come Up With a Monthly Retirement Budget
Figure out how much you need each month to live comfortably for at least 20 years after retirement. That’s the financial benchmark for your retirement saving. You’ll feel a lot more secure knowing that you have a tangible goal and plan in place for covering all the essentials.
While you’re looking at the monthly budget, make sure you’re living below your means during your career years. Use the “permanent standard of living” philosophy. Decide on an acceptable standard of living and try to stick to that even as your income rises. That way you’re in a position to save and live well in retirement.
Line Up a Retirement Side Gig
We live in a gig economy. People of all ages are offering their skills and services online through sites like TaskRabbit, Thumbtack and Fiver. Consider what you can do to earn supplemental income in retirement. If needed, start lining up the dominos while you’re still working so you’re set to earn extra income right off the bat. You may want to register a legal business name, create a website or earn a certification. You should definitely have a side hustle in retirement.
Pay Down Debt Before Retirement
During your retirement planning, factor in your existing debt. Plan to get out off debt before retirement and you’ll have fewer payments to worry about. According to The Simple Dollar, Americans can pay over $8,000 in interest alone each year. The sooner debt is paid down that money can be put towards saving for retirement.
Relying solely on Social Security for retirement will likely create financial stress. Take a few precautions during the planning phase and your retirement will be the relaxing time off you always imagined it would be.
What about you? Are you worried about how to make retirement less stressful? How are you going about trying?