Opinions expressed are solely those of the author and do not reflect the views of Rolling Stone editors or publishers.
When cultural publications, like Rolling Stone, first started producing content that appealed to the Baby Boomers, I doubt very seriously that one day there would be content related to topics like “Are You Automatically Enrolled in Medicare?” or “How to Appeal Income Related Monthly Adjustment Amounts.” But just like people over time, content and the dissemination of information has to evolve with its readership. Though many of those people still would likely want to read about popular culture, their needs have surely changed in the content that is important to them.
In my experience operating in the insurance and Medicare space, I’ve seen firsthand the many challenges older adults face and find themselves navigating today. Healthcare, retirement solvency, inflation and many other lifestyle expectancy concepts are at the forefront of many older adults’ mindsets now. Not only this but younger generations and creatives from all walks of life can benefit from some forethought when it comes to planning for the later years in life.
So in this article, I’d like to highlight three tips to navigate the top three concerns of the average older adult, or as I like to say, the “original” Rolling Stone reader.
1. Healthcare Costs
Avoid paying too much for healthcare in retirement by understanding the total difference in Medicare with a Medigap Plan and a Medicare Advantage Plan. Also, make sure you appeal any decision to hit you with an Income Related Monthly Adjustment Amount (IRMAA) by filling out a quick Social Security form.
These are just two tips in a barrage of information one has to navigate when making healthcare decisions for retirement. Medicare Advantage being mistaken for Medicare with a Medigap plan is a monstrous mistake we see people make in this market. Either option is viable if someone understands the pros and cons. Medicare Advantage has cost controls and is less expensive, but someone choosing this option has to be OK with the insurance company having more control over who you can see and what treatment is acceptable. With Medicare paired with a Medigap plan, you are only dealing with the claims department at the Center for Medicare and Medicaid services, and we have seen them be much more lenient on approving healthcare decisions at the discretion of the doctor.
One way you can navigate this gauntlet successfully is by getting the opinion of three different brokers. It’s unacceptable to assume that all people navigating Medicare will have the aptitude for this information, and we must recommend people consider finding a trustworthy professional to help with these decisions that can sometimes be irreversible.
Make sure your investments outpace typical inflation rates. There are many things that have guaranteed rates or at least no risk for loss and higher potential upside. Consider multi-year guaranteed annuities, fixed indexed annuities, and of course, make sure you’re diversified into regular indexed mutual funds. Fixed indexed annuities and multi-year guaranteed annuities are both safe options to consider because they have minimum guaranteed interest rates. Fixed indexed annuities often have lower guaranteed rates; however, they have a high potential yield of return.
If you want another ultrasafe route with a lower guaranty, you can of course consider a certificate of deposit. CDs are often considered extremely safe because they are backed up by the FDIC, like money in a savings or checking account. It is important to note that annuities are backed up by the state guaranty association as well, so both are very safe options. Just be careful since certificates of deposit do not normally outpace inflation.
3. Overall Retirement Solvency
How much do you really need to continue your lifestyle? Well, life expectancy is much higher than it has ever been, and we commonly see people with low expectations of how long they’re living after retirement.
Unfortunately, this allows them the psychological freedom to spend too much of their retirement early on. Our recommendation for adequate retirement is always more, more, more. It’s all dependent on someone’s lifestyle; however, based on average American standards, we think retiring with less than $1 million in a retirement portfolio these days is extremely unadvisable. As a matter of fact, we advise that the average household be planning on having $3 million in their retirement account to ensure they do not have to go without it when they need it the most. We obviously understand that every situation is different and many people are far from this mark, and it’s difficult to quit navigating spending in your current state cold turkey.
Three steps to immediately begin working toward your savings goals — whatever they may be — are:
1. Do the math: How far are you from it and how much would you need to save without interest to attain your goal?
2. Budget immediately and begin to find the low-hanging fruit when it comes to putting extra money away.
3. Find a “side hustle” to create some additional income. Many of us have had an idea or passion we can make money from but are too afraid to try it. Our recommendation is to dip your toes in and put 100 percent of that money away.
Though the older audiences would not have thought this information would be helpful in the 1960s, I meet with those same people almost every day now and I know that these topics are at the forefront of their concern. While much emphasis has been placed on content geared toward younger generations, even those generations would benefit from the realistic notion that life comes with changing concerns and that the longer they wait to prepare for them, the more stress they’ll be on later in life.
The information provided here is not investment, tax or financial advice. You should consult with a licensed professional for advice concerning your specific situation.