In Retirement, Financial Planning Doesn’t Equal Just Investments

Financial planning means different things at different times in a person’s life. For those 65 and older who have PIVOTed away from their working years and into retirement, financial planning shouldn’t be based on just investments. While investments are important, because you never want to outlive your finances, priorities do shift with age.

PIVOTers, as I like to call them, should be conscientious about things like Social Security and Medicare benefits, staying busy and simplifying their life.

Medicare and Social Security

Medicare is an important part of a person’s late-60s and beyond. Having the right health insurance lessens a person’s out-of-pocket costs and helps ensure they’re taken care of.

Here are 10 key points to know about Medicare:

1. You sign up for Medicare at age 65. You get a window to sign up three months before your birthday, the month of your birthday and three months afterward. You may want to put it on your calendar now.
2. Medicare covers non-custodial claims. Medicare covers broken bones and doctor visits, not nursing home costs. That’s a different type of insurance called Long Term Care Insurance.
3. Medicare is not Medicaid. Medicaid is a health insurance program designed for those who are indigent. There is a financial qualification to get Medicaid and the benefits are different than for those on Medicare. Your average retiree is on Medicare.
4. Part A is to pay for hospital visits. You will have a deductible and this deductible amount changes each year.
5. Part B is to pay for doctors’ visits. You will have to pay a small deductible, then 20 percent of the costs up to a maximum out-of-pocket.
6. Part D is to pay for prescriptions. Make sure you check the drug list for each plan before you enroll.
7. Medicare Advantage Plans are a private health insurance alternative to government Medicare. About 30 percent of beneficiaries use Medicare Advantage Plans.
8. If you are receiving Social Security, the cost of Medicare will come out of your Social Security check.
9. The cost of Medicare depends on your income. If you have a high retirement income, you and your spouse could be paying almost $800 per month for this coverage.
10. You can change most coverage once per year, usually in the fall.

Health insurance can be tricky. But the Medicare market, as of late, has been kind to our retirees.

Staying Busy in Retirement

Once the retirement honeymoon is over, the idea of running out of money may set in. While you still have some energy left, going back to work can be a smart move! Part-time work can take the pressure off of your investment withdrawals and allow them to cook longer. Also, making a little extra money while you can doesn’t hurt if you enjoy it.

The obstacles for retirees to work are not insurmountable. With brick-and-mortar businesses under financial pressure, e-commerce has filled in the gaps. The barrier to entry for entrepreneurs has dropped dramatically. Studies show that many new entrepreneurs today are seniors. You can be a part of this positive trend!

Here are some common jobs for retires: 

• Usher – Many professional sports teams hire retirees to help escort intoxicated fans out of professional sports games or show fans to their seats.
• Ranch-hands – If you have a friend with land, many times they’ll pay you to help cut trees, fix fences and guard against trespassers.
• Flea-market vendors – Some retirees decide to turn their hobbies into part-time work, like wood carving or gardening.
• Call center worker – Answering phones doesn’t require being on your feet for long hours and can be an easy task for a retiree.

Volunteering is another avenue to stay busy. There are many ways a retiree can volunteer their newfound time to help others – at hospitals, animal shelters, church ministries or even in your grandchildren’s classrooms.

Simplifying Life

Like a baby gripping onto a toy, I know it can be difficult for some to let go of things in life, but the small price of simplicity can be worth it.

Here are 10 things you can do to help simplify your life:

1. Downsize your home to have the most efficient use of space.
2. Pay off all consumer debt and close out credit cards, especially department store cards.
3. Avoid paying bills with checks. The process takes too much time. Set up bills on auto draft or bill pay.
4. Clean out your closets and give clothes to Goodwill.
5. Eliminate unnecessary bank accounts. Five savings accounts don’t compound more than one account if the money is equal.
6. Consolidate investments.
7. Have a garage sale and give away the rest.
8. Sell real estate holdings.
9. Close a business or network marketing alliance.
10. Cancel subscriptions to magazines and other items you rarely use.

Remember, your Golden Years are a time to enjoy. You’ve worked hard and hopefully planned for a great retirement, so make sure you enjoy it! A little planning ahead of time can pay big dividends in the end.

Not associated with or endorsed by the Social Security Administration or any other government agency.

This material is provided by PAX Financial Group, LLC. The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. The information herein has been derived from sources believed to be accurate. Please note: Investing involves risk, and past performance is no guarantee of future results. Investments will fluctuate and when redeemed may be worth more or less than when originally invested. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All market indices discussed are unmanaged and are not illustrative of any particular investment. Indices do not incur management fees, costs and expenses, and cannot be invested into directly. All economic and performance data is historical and not indicative of future results.