Financial wellness is central to retirement planning. Balancing financial priorities is like eating a balanced meal. When preparing for retirement, it is important to make a commitment to your financial health as you would to your personal health. By looking at one’s finances and establishing healthy habits early on, the more prepared you will be for life after retirement.
According to a recent study conducted by Massachusetts Mutual Life Insurance Company (MassMutual), half of U.S. Latinos plan on relying more on savings than on Social Security income after retirement. While Social Security plays a role in retirement planning, there are many other funding options to consider. Taking the rights steps at an early stage is key to achieving financial wellness after retirement.
Here are three tips to help secure a healthy financial future:
Determine how much you will need
In order to create a solid retirement plan, it’s important to understand your current financial situation and determine how much you will need for retirement. Know your income and expenses, and the value of your savings and investments. Then define your goals, for both the present and retirement. Maybe you want to save for traveling abroad or for your children’s college education, while others prefer to have a part-time job or stay involved with the business they built. Make sure you conservatively estimate what you need with all these factors considered.
Know the role of Social Security
Determining how much money you will need after retirement is the first step to knowing the role of Social Security for your overall retirement plan. Just like with healthy eating, planning for retirement is about finding the right balance for you. This means asking yourself, how will Social Security fit into your overall retirement plan? The answer: it should only be one part of your plan. While Social Security is a great supplement to your income, it probably won’t be enough on its own. So be sure to fill your plate with all sorts of healthy options for a well-balanced retirement. To help close the gap between savings and Social Security, consider other sources of income like regular contributions to your company retirement account (being sure to maximize any employer match), external investments and annuities.
Plan ahead for health care
A study conducted by MassMutual found that 73 percent of retirees in better health say they feel financially secure compared to 51 percent of retirees in poorer health, and planning for the unexpected can help maintain peace of mind. One of the biggest curveballs in retirement can be related to the cost of health care. Be sure to carefully think through and consider your options for paying for health care in your retirement, which may include but should not be limited to Medicare, Medicaid and various forms of insurance.
Maintaining financial wellness after retirement is all about keeping a good balance and knowing the different options that are available for savings and income. The biggest benefit in the end will be peace of mind and enjoying a comfortable retirement that will fulfill your needs and expectations. A financial professional can work with you to create a roadmap towards financial wellness. To learn more, visit massmutual.com/Latino.