Retirement is something that is not going to be gift wrapped and handed to you when you reach a certain birthday. Unfortunately, there are those who buy into certain misconceptions. They believe that retirement is lying in wait, and they don’t take any steps to proactively make financial preparations.
We would like to take a look at three of these misconceptions here.
1.) Health care is a given because I’m going to qualify for Medicare coverage.
Medicare is not entirely comprehensive; it is more of a safety net. Part B of the program pays for visits to physicians and outpatient care. You have to pay a premium every month for Medicare Part B coverage.
The amount that you must pay monthly for this coverage varies depending on your earnings. In 2013 most people are paying $104.90 per month. This comes out of your Social Security direct deposit.
There are also deductibles and co-payments for hospital stays that are covered by Medicare Part A.
Health care is far from free once you qualify for Medicare.
2.) I can live well on my Social Security benefit.
You be the judge. At the end of 2012 the average monthly Social Security benefit in the United States was $1262.
3.) Nursing home and assisted living facility expenses will be picked up by Medicare so I don’t have to worry about that.
This is completely untrue. Medicare does not pay for living assistance beyond 100 days of convalescent care. Most people will need long-term-care, and the average annual charge for a private room in a nursing home in New York last year exceeded $100,000.
Given the realities highlighted above, if you have not already implemented a cogent strategy for aging you may want to take action sooner rather than later.
Mark S. Eghrari, Estate Planning Attorney
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