As people prepare for retirement, there are many issues to consider, but one tops them all, according to one expert.
“Where you live could actually probably be the biggest retirement decision you make because of the differences in taxes in different states,” Silvur founder and CEO Rhian Horgan told Yahoo Finance Live (video above) when offering advice to people nearing retirement on how they should plan ahead.
The second big decision folks should think about? Health care.
“With the average retiree spending upwards of $5,000 a year on health care costs and retirement, it’s something they really have to plan for,” Horgan said. “And so I think for many retirees, as those numbers become more and more clear to them, they’re taking a much more proactive step and adding that retirement health care costs to their budgets.”
Horgan provided three more tips on how to save more for retirement in 2023, especially after rocky stock market in 2022. Here’s what she had to say.
Elderly men walk inside deserted John Knox Village, a retirement community in Pompano Beach, Florida on March 21, 2020. (Photo by CHANDAN KHANNA/AFP via Getty Images)
Know where you stand today
It’s hard to know where you need to go if you don’t know where your savings are today.
“Get your account balances updated. Again, if you’re working off numbers from last year, they’re probably not correct. So get the numbers updated,” Horgan said.
For instance, those who stopped looking at their 401(k) or other retirement account balances after a dismal first three quarters last year may be mildly surprised to see that their balances rebounded some in the final quarter of the year. For instance, the S&P 500 rebounded 7% in the fourth quarter after falling 25% over the previous three quarters.
Understand your spending
In addition to calculating current account balances, Horgan told Yahoo Finance Live that consumers should also track their expenses. While inflation slowed to 6.5% in December, it can still impact people’s monthly budgets.
“When you’re updating your numbers, not only think about updating your financial savings numbers, but think about spending. Spending is all about really making sure that you understand how the inflationary environment is impacting what your monthly spend is and what it’ll be in the future,” Horgan said.
( Photo Credit: Getty Creative)
Tally up your retirement income
Workers should not forget to add their expected Social Security benefits to their other sources of retirement income to get a clear picture of what to expect in retirement. The recent cost-of-living increase to Social Security should help increase folks’ ultimate income …….
