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Protect Your Retirement Fund from Future Calamities

Protect Your Retirement Fund from Future Calamities

2020 left everything in shambles. Most retirees found their pensions inadequate, and working Americans took a hit in their finances. Fear was the dominant emotion, and people were buying insurance because everyone worried about dying and becoming a burden to their loved ones. There was a demand to look for sellers of final expense insurance, so they won’t leave their loved ones in debt or in financial trouble. But while the worst has passed, another disaster can wreak havoc on your future — especially if you don’t make plans for your retirement.

Put More Money in Your Pension

The three legs of the retirement table are your pension, Social Security, and bank savings. Unfortunately, Social Security reserves will be running depleted by 2034. That doesn’t mean you won’t be getting the usual retirement benefits, but 25 percent or more will be cut. With one leg short, you’ll have to make sure you can stand on just two — and strengthening your pension is the optimal choice. Very few American workers have more than $100,000 on their 401k. It would be a stretch to make that amount last for more than ten years — what more, 15 or 20?

Max out your 401k payments as much as possible and try to make up for the short months (or years) after you’re 50. Your kids should have their careers by then, so you can hike your contributions to make up for previous shortfalls. Retirement isn’t mandatory at 65. You can continue working on adding on to your 401k if your employer allows it — although you might need to take a pay cut. A few extra years working allows you to delay the drain on your limited pension funds.

Expand Your Medicare Coverage

Medical bills and medication expenses will be the biggest drain on your retirement fund. Unfortunately, basic Medicare won’t cover everything — particularly extended hospital stays and medication. However, you can apply for additional coverage through private insurance companies that offer expanded Medicare or Medicare Advantage plans. An expanded Medicare plan will cover most medication and a few other expenses tied to your health and quality of life.

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Most plans will cover non-emergency expenditures like prescription glasses, hearing aids, as well as preventative expenses (such as flu shots and other vaccines). Some plans factor in mobility issues — covering mobility aids like wheelchairs or walking aids, as well as home renovations to accommodate wheelchair use. Most Medicare Advantage plans will allow you to choose your own physicians from within their network.

Get Some Exercise

2020 highlighted the importance of staying fit. Obesity and being overweight lead to a host of medical conditions and ailments like type 2 diabetes, heart disease, and strokes. Obesity is also associated with gallbladder diseases, cancers, osteoarthritis, respiratory problems, and sleep apnea. A big chunk of healthcare costs in the US is attributed to obesity. A study by the World Food Center of the University of California-Davis estimated a $90,000 increase in lifetime expenditures for obese individuals.

The events of 2020 also highlighted the increased risk obese individuals face due to the coronavirus, and the World Health Organization predicts the COVID-19 strain will be around for decades. A few minutes of exercise a day can help you maintain or reduce your weight. Physical activity can be anything from walking around the block to doing a bit of gardening. Getting your body moving will also prevent your muscles and bones from degrading, limiting the risk of mobility issues.

Avoid Accidents at Home

Falls are one of the leading causes of emergency room visits for seniors, with one in three seniors suffering from falls each year. Once you’re nearing retirement age, consider making a few changes to your house to avoid nasty slips and falls. Most falls occur in the bathroom, so a few handrails and supports should make a big difference. You could place handrails heading towards the toilet and add a few supports to make sitting down and standing up easier and safer. Showers might not be safe anymore, so consider a walk-in tub to avoid slippery floors.

Consider Moving to a Tax Haven

Your retirement funds are already limited — you wouldn’t want the government to take a cut. You don’t have to head to the Bahamas to avoid taxes — as states like Texas, Arizona, and Florida won’t touch your 401k. Opt for a home in the suburbs for lower rent or property prices.

Retirement just got a little bit harder — but you can ensure a comfortable and secure future by making the right choices early on. Fortify your pension, avoid pitfalls, and hold on to your hard-earned money as much as you can.

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