The longer you live the more money you will have to spend, or conversely, the more money you should start saving now to prepare for living into your 100s. Modern medicine and the fact that many diseases and illnesses are able to be caught and even corrected early means that many of us are living longer, and in many cases, healthier lives.
If you’re hoping to live to be 100, how will you make certain you can afford it? The time is now to look at your finances and prepare for a secure financial life in your Golden Years. Here are some steps you can take to make sure you don’t outlive your money:
- Take stock of your spending. Scrutinize your spending for the next 30 days. Track where you’re spending and where you might be able to cut back and put that money into a savings account. It may be easier, and paint a more accurate picture, if you analyze three months’ worth of spending and take an average.
- Talk with your CPA to get a snapshot of the amount of money you may need into retirement. Many individuals believe they will spend less money once they’re retired because they won’t have the expenses for food or commuting and other out of pocket expenses; what they don’t plan for is the money spent on hobbies or travel or leisure, now that you have leisure time. You may also see an increase in your family food budget because you’ll be eating more meals at home than in the past.
- Save as much money, as often as you can. Check on your investments and, depending on your age, invest either more robustly or conservatively. Your financial adviser is your best point of contact for your investment planning.
- Take a look at your lifestyle. Are there items you will want to do once you retire that you don’t now? How much will they cost? Are there activities you do now that you won’t once you retire? How much do they cost? If you plan to travel or take up a new hobby you will want to calculate those costs so you can budget for them. You don’t want to look at retirement as “sitting around the house with nothing to do” time you want to enjoy your Golden Years and pursue hobbies and activities you perhaps didn’t have time for while you were working and raising a family.
- Will you be able to afford to live in your own home? Will you need to downsize or even make arrangements to live in a retirement community? What will that cost? Will it make sense for you to invest in long-term care insurance? Talk with a trusted advisor before you make any decisions on this purchase.
- Get your paperwork in order. Don’t wait until you need a power of attorney or a healthcare proxy or a will – by the time you need it, it will be too late. Talk with your attorney and your family and get these papers drawn up early so they are in place in the event of a health emergency when you can’t speak for yourself. While it may be a bit morbid, you may want to put your funeral arrangements in writing and even get them planned so that your family won’t have to wonder at what your wishes would have been.
- Pay off as much of your debt as possible. It’s best to not have to worry about credit card debt or loans with high interest rates, especially when retirement is drawing near and when your income will likely be lower than it was when you were working.
Taking steps to prepare for living to be 100-years-old is best done when you’re younger and in good health!