Arizona Tribune - 7 Financial Factors to Consider While You Age

This may bring new challenges and considerations to your financial planning. Health care, Social Security, senior life insurance , and estate planning can become higher priorities as your plans for retirement start to become a reality.

To help you out, this article covers eight financial factors to keep in mind as you age.

1. Retirement Savings

Retirement savings can be the bedrock of a financially healthy retirement. Review your current savings rate and investment strategy to ensure your risk and returns align with your retirement needs.

Continue contributing consistently, and make sure your withdrawal strategy is as tax efficient as possible. A financial advisor can be helpful here as they can analyze your progress and adjust your investments to meet your goals of a financially secure retirement.

2. Budgeting

A well-structured budget helps you stretch your retirement savings and assets further while reducing the chance you run out.

Budgeting helps ensure your expenses are below your monthly income streams so that your assets can last. It also helps make it easier to reduce unnecessary expenses, and it gives you peace of mind since you can see where your dollars are going.

Review your budget monthly and adjust it if necessary. This will help you feel financially secure, knowing you spend less than you draw from your assets.

3. Social Security Benefits

You become eligible for Social Security at age 62 and can delay it until age 70. The longer you delay it, the more your monthly benefit will be since you will begin taking it at an older age.

Furthermore, you may work longer before taking Social Security. Your benefit is calculated using your average wages over several decades. Since your peak earning years tend to be near the end of your career, this can boost your Social Security benefit further. ¹

Weigh your retirement income and assets against your needs to time your Social Security payments to maximize your benefits.

4. Medicare and Health Coverage

Health care needs tend to increase as we age, so getting proper health insurance coverage is important.

Most people qualify for Medicare at age 65, although people with certain disabilities may qualify earlier. It's important to learn what each part of Medicare covers and the eligibility requirements for each:

• Part A: Hospital insurance, covering hospitals, skilled nursing facility care, hospice care, and home health care.

• Part B: Medical insurance, covering most preventive visits, outpatient care, home health care, and more.

• Part C: Medicare-approved plans offered by private insurers, called Medicare Advantage Plans.

• Part D: Prescription drugs, including many recommended vaccines and shots. ²

Medicare may not cover everything. Estimate your potential health care needs and consider supplementing Medicare with private insurance if needed.

5. Estate Planning

Your estate plan can dictate your wishes for distributing your assets and other end-of-life matters. It helps avoid probate court and other legal and family complications.

Here are some important pieces of your estate plan: ³

• Will: Explains how to distribute your assets after death. Also, specifies guardians for minor children.

• Living Trust: Helps manage your assets during your lifetime and can avoid probate upon death.

• Durable Power of Attorney: Selects someone to manage your financial affairs, such as accessing bank accounts, if you become incapacitated.

• Health Care Proxy: Selects a trusted individual to make medical decisions on your behalf if you cannot do so.

• Living Will: Contains instructions for your medical care desires in end-of-life situations.

• HIPAA Release Form : Lets designated individuals access your health history and medical records.

Altogether, these help your estate's executor carry out your exact needs so that you and your loved ones are cared for at the end of your life.

6. Life Insurance Coverage

Senior life insurance can offer many uses for people approaching retirement.

For example, term life insurance typically offer larger death benefits, for competitive premiums. This can help seniors who would like to drastically increase the wealth they pass to their heirs.

Another life insurance option is final expense insurance for seniors . These plans typically have lower premiums because they offer a smaller death benefit that can help pay for funeral costs, medical bills, and other end-of-life expenses. Final expense insurance can work well if you want to help your loved ones cover your end-of-life costs.

A traditional permanent life insurance policy like whole life insurance can offer lifelong coverage and wealth-building potential through cash value. However, premiums are higher than other policy types.

Consider your budget and financial needs before selecting a policy type.

7. Taxes

Managing and minimizing taxes in retirement becomes more important for two reasons:

1. Fixed income: Taxes can significantly reduce your available income if you do not manage them well.

2. Complexity: Retirement may entail multiple income streams from different accounts and products. Each may have different tax consequences, necessitating a strategy for arranging retirement income in a tax-efficient manner.

Furthermore, states and localities can vary in income, property, and sales taxes. Many factors besides taxes go into deciding where to live, but they can play a role. Some retirees may move to more tax-friendly locations to save.

Consider These Factors as You Age

As we age, matters like retirement savings, debt, health care, and estate planning can become top priorities. These all require vigilance when it comes to budgeting.

By considering these factors, you can create more financial security as you age and set yourself up for an enjoyable and stable retirement.

Content within this article is provided for general informational purposes and is not provided as tax, legal, health, or financial advice for any person or for any specific situation. Employers, employees, and other individuals should contact their own advisers about their situations. For complete details, including availability and costs of Aflac insurance, please contact your local Aflac agent.

Sources:

¹ Social Security Administration - Social Security Benefits. https://www.ssa.gov/oact/quickcalc/early_late.html . Accessed October 16, 2024.

² Social Security Administration - Parts of Medicare. https://www.ssa.gov/medicare/plan/medicare-parts . Accessed October 16, 2024.

³ National Council on Aging - Estate Planning Guide and Checklist for 2024. Updated September 20, 2024. https://www.ncoa.org/adviser/estate-planning/estate-planning-guide-checklist/ . Accessed October 16, 2024.

Aflac coverage is underwritten by American Family Life Assurance Company of Columbus. In New York, Aflac coverage is underwritten by American Family Life Assurance Company of New York.

Aflac life plans - 68000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC1368100, ICC1368200, ICC1368300, ICC1368400. In Delaware, Policies A68100-A68400. 65000 series: In Virginia, Policies ICC0965JTO & ICC0965JWO. B61000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B61JWO & ICC18B61JTO. In Delaware, Policies B61JWO, B61JTO. B60000 series: In Arkansas, Idaho, Oklahoma & Virginia, Policies: ICC18B60C10, ICC18B60100, ICC18B60200, ICC18B60300, & ICC18B60400. Q60000 series/Whole: In Arkansas & Delaware, Policy Q60100M. In Idaho, Policy Q60100MID. In Oklahoma, Policy Q60100MOK. Not available in Virginia. Q60000 series/Term: In Delaware, Policies Q60200CM. In Arkansas, Idaho, Oklahoma, Policies ICC18Q60200C, ICC18Q60300C, ICC18Q60400C. Not available in Virginia.

Aflac Final Expense insurance coverage is underwritten by Tier One Insurance Company, a subsidiary of Aflac Incorporated and is administered by Aetna Life Insurance Company. Tier One Insurance Company is part of the Aflac family of insurers. In California, Tier One Insurance Company does business as Tier One Life Insurance Company (Tier One NAIC 92908).

In AR, DE, ID, OK and VA: Policies ICC21-AFLLBL21 and ICC21-AFLRPL21; and Riders ICC21-AFLABR22, ICC21-AFLADB22, and ICC21-AFLCDR22. Aflac Final Expense policies are not available in New York.

Coverage may not be available in all states, including but not limited to DE, ID, NJ, NM, NY or VA. Benefits/premium rates may vary based on state and plan levels. Optional riders may be available at an additional cost. Policies and riders may also contain a waiting period. Refer to the exact policy and rider forms for benefit details, definitions, limitations, and exclusions.

Aflac WWHQ | Tier One | 1932 Wynnton Road | Columbus, GA 31999

Aflac New York | 22 Corporate Woods Boulevard, Suite 2 | Albany, NY 12211

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CONTACT:

Senior PR & Corporate Communications
Contact: Angie Blackmar, 706-392-2097 or [email protected]

SOURCE: Aflac

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