Much of the attention to retirement planning
involves building up savings, but proper financial preparation for retirement
involves more than that. Other vital steps:
* Pay off debt. Before you retire, you’ll be
better off if your credit card, mortgage, and other debts are paid off. The
money you spend on debt repayment will eat into the amount you have left for
other retirement pursuits.
* Keep up your health insurance. Even after
you reach 65 and qualify for Medicare, you either should buy a Medigap policy
as a supplement, sign up for a Medicare Advantage plan, or if you’re continuing
your FEHB coverage, as most federal retirees do, keep that and possibly
consider switching to a lower cost plan. Medicare has many gaps (deductibles,
coinsurance, vision care, hearing aids, etc.) that need to be covered.
Second-payer plans, like FEHB for someone who has Medicare, fill many of those
gaps.
* You should investigate long-term care
insurance, too—both the government’s Federal Long Term Care Insurance Program
and whatever is available (less and less) in the private market.
* Don’t neglect other coverage. You’ll still
need adequate home and auto insurance; excess liability (“umbrella”) coverage
also is vital.
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