Dreaming of an Early Retirement? Consider These Five Actions First – 2
By Saghir A. Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities.)
- Take health-care costs into account
Identifying possible retirement-planning could also involve weighing health expenses if you retire early. Even if you become eligible for Medicare soon (coverage starts at 65), a young partner could need another form of coverage.
If you have a spouse who will continue to work for an employer who provides health insurance, one option may be to get coverage under that plan. Otherwise, paying for health coverage until you qualify for Medicare at age 65 will be an important expense to consider in your retirement planning.
This will also be a time to explore costs associated with long-term-care insurance to help cover costs associated with in-home health care, assisted living facilities, or nursing homes. These costs aren’t covered by traditional health insurance, making them a common planning gap that can be costly: today, the median annual cost of a private room in a nursing home is more than $100,000.
2. Carefully consider when to start collecting Social Security
You can opt to take Social Security payment as early as age 62, though delaying can mean bigger checks in future years. However, postponing receiving social security isn’t always the best choice.
“What a lot of people don’t consider is what effect that has on their overall plan.” Delaying Social Security could mean you would need to live entirely off your saving and investments for several years. That’s less money that might potentially be there at the back end of your life expectancy - less money that you might need or may want to go to your kids.”
3. Explore ways to fill potential income gaps
So, what happens if you find a gap between your retirement goals and your expected or actual retirement income? It mostly boils down to two main choices: Reduce your spending or find more income.
If you’re thinking about continuing to work in some capacity, you’re not alone. In 2018, 29% of baby boomers ages 65 to 72 were working or looking for work, compared to 19% of the previous generation when they were 65 to 72, according to a Pew Research Center study. Knowles shares the example of an airline pilot who was retiring in his 50s; he planned to get a job at a home improvement store, which he saw a as a win-win because it could be an extra income and be less stressful than flying passenger jets. Some retirees start new job or careers based on hobbies and interests - giving music lessons or overseeing operations at a golf course, for example. “Earn a few bucks to supplement what you want to do if it’s something you enjoy at the same time, that’s great.”
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
