A paid-off mortgage is a huge financial win, especially if you are nearing retirement. Owning a home free-and-clear is a significant achievement of your working years.
Yet, a paid-off home should only be part of your retirement plan. Consider these three things to make sure you are ready for retirement.
Don’t Forget: You Still Need to Pay the Electric Bill
A paid-off home helps free up your budget, but your budget will likely change in retirement. What good is a paid-off home if you don’t have money to pay your monthly bills? Your retirement budget should include line items such as food, gas, insurance, utilities, property taxes, and vehicle maintenance. If all your money is tied up in equity, it could be difficult to cover basic living costs.
Everyday expenses are just part of it. It’s important to be realistic about health care costs and unexpected medical expenses associated with aging. While a magic formula doesn’t exist, a recent Fidelity analysis showed that a 65-year-old retired couple would need an estimated $275,000 for health care. In addition to health care, Long-Term Care Insurance is needed to pay for long term care expenses not covered by health care plans.
But don’t forget, retirement should be fun too! Include travel costs in your budget to visit your grandkids or landmarks you’ve dreamed of seeing.
Saving for Retirement Doesn’t Have to be Difficult
It’s suggested that more than half of Americans aren’t saving enough for retirement. Cost of living tops as the number one reason people aren’t putting more money away for retirement, but lack of planning is another barrier.
If you’re pushing hard toward the goal of having a paid-off home, you’re ahead of the crowd. You have the drive and ambition to make wise choices with your money. But there is still more work to do.
Partner with investment professionals and a long term care (LTC) specialist to create a workable retirement plan. A planner can show you how your paid-off home can fit into your financial goals and give you an idea of how much money you’ll need to enjoy retirement. LTC specialists can shop the market for the best value and help you decide the right coverage to fit your needs.
At LTC Consumer, we help individuals and couples plan for a secure financial future with Long Term Care Insurance. Request a quote and speak with an LTC specialist today to learn more about your options.