Retirement

It’s interesting how retirement seems so far away…and then seems to sneak-up on us around age 40! Planning ahead is the best thing you can do to secure an enjoyable and fully-funded retirement, and Midland Credit Union is here to help. We have professionals who can provide guidance as to which investment vehicles are right for you, and we’ll take in to consideration your life goals, not just your financial goals.

Start Saving

Starting to save for retirement in your 20s gives you a tremendous edge! Even if you can only tuck-away $25-$50 per week in a retirement plan, you’ll be surprised how much that money will grow by retirement! Consider this scenario: If you begin saving for retirement at 25, putting away $2,000 a year (for just 40 years), you’ll have around $560,000, assuming earnings grow at 8 percent annually. Now, let’s say you wait until you’re 35 to start saving. You put away the same $2,000 a year, but for three decades instead, and earnings grow at 8 percent a year. When you’re 65 you’ll wind up with around $245,000 — less than half the money.

How Much Do I Need To Retire?

This is the million-dollar question everyone has…literally! When planning your retirement (particularly as you get closer), there’s a simple way to get an idea of whether or not you’ll have enough. Compare your savings with your current spending and determine if what you have will take you long into your golden years. Of course, no one knows how long they will live, so you should calculate out to at least 90 years plus, and leave some wiggle-room.

Now, understand that this is an incredibly simplified way to calculate your need, but it will at least help you determine if you’re falling drastically short. The best way to get (and stay) on track is to meet with a financial advisor regularly. Be sure that advisor takes into account your desired lifestyle and entertainment/travel plans for retirement, as well as any desire to leave a legacy to your family.

Insurance During Retirement

It’s just as important to have your assets protected when you’re retired as it was when you were a full-time wage earner. Consider some insurance changes you may need to make.

Health Insurance
The exact amount health insurance will cost you can vary quite a bit depending on how healthy you are, whether you receive any employer-provided retiree benefits, and other factors.

One recent survey found that the average retiree who receives at least some health insurance coverage from a former employer pays monthly premiums of $552 per month ($6,624 per year) if under 65 and $227 ($2,724 annually) if over 65. (The big drop after 65 occurs because your employer is going to make sure you enroll in Medicare at that point and then reduce the coverage it provides you through the company plan. If you get no help from your former employer, your costs will probably be much higher.

Medicare does kick in once you are 65, but there are costs for that coverage, too. Add it all up, and you need to get serious about stashing away some money today to help cover your health costs in retirement. Even when you are covered by Medicare and any other health insurance, you still are going to have to pay for some costs, including premiums, deductibles, co-pays and – most importantly for many retirees – prescription drugs.

Source: CNN Money

Life Insurance
Life insurance helps protect your spouse and children from poverty in the case of your untimely death. However, once your children become self-sufficient and you and your spouse accumulate significant assets, there’s less of a need to keep paying the premiums for life insurance. If, however, you continue to work or start a second career after retirement, and are earning a good wage that will be missed if something happens to you, you may wish to continue with a higher level of life insurance.

Ultimately, the question you need to ask yourself is, ‘What would happen if I were no longer here?’ If you are not responsible for anyone else and you have sufficient assets to cover your bills, then there is very little need to continue to hold life insurance in retirement.