How To Prep Your Finances For 2021 Pt.2

In continuation of last weeks series recap, below are steps 6-10:

Lesson 6 of the Senior Exec Money Series: Get your Social Security estimate.

Think of retirement planning as the art (and science) of breaking down one dollar into 100 pennies. Now that you’ve stopped working, the goal is to come up with every penny in that dollar – year in and year out (how many actual dollars you’ll need is a topic for another day).

The easiest and most common way of recreating that dollar is to draw on savings: retirement savings (IRA’s, Roth IRA’s, 401k’s) and regular savings (investment accounts, bank savings, etc).

You’ll also want to include any sources of income: rental properties, pensions, annuitized income, part time work, and for all its criticisms: Social Security.

While Social Security shouldn’t be your primary source of retirement income, how much you receive can greatly influence how long you stretch your other resources.

So if you’re still a few pennies short on the dollar, click the link below and get your official estimate.

You’ll have more accurate information when creating your plan and a clearer outlook.

Lesson 7 of the Senior Exec Money Series: Tune Up Your Home Office

For some, working from home is old hat. For others, myself included, it was a “once in a while” sort of thing.

As several companies announce work from home structures on an extended or permanent basis, don’t get caught off guard.

The below article from Wired outlines some resources you’ll need for your home office. Use it as a starting point – add or reduce as needed.

Whether you eventually find yourself back in the office full time or prefer not having a commute, you’ll be that much more efficient.

Lesson 8 of the Senior Exec Money Series: Use your HSA to Offset Retirement Expenses

It’s been estimated that medical expenses in retirement can cost up to $285k for a married couple.

While we place great emphasis on saving and investing to help meet our normal daily expenses: food, clothing, shelter – few take into account the rising costs of medical care.

Tack on the risk of needing assisted living care and your retirement can be easily thrown off track.

HSA’s (for those qualified) can be ideal for several reasons:

  1. Tax deferred growth – much like an IRA
  2. Can be used for qualified medical expenses – regardless of age
  3. Contributions are tax deductible
  4. You can (and should) invest your HSA funds – allowing you to grow your nest egg even further

Lesson 9 of the Senior Exec Money Series: Elections and Your Money

This one isn’t specific to 2020 – it actually goes back 150 years – literally.

As if this year hasn’t given us enough volatility, we also have an election in a few days. While there’s plenty of speculation going around over the outcome of the election, there’s an equal amount of speculation over what direction the markets will take as a result.

Regardless of your position, many feel the urge to do “something” in anticipation of an unknown outcome.

The good news is you don’t have to speculate. History tells a different story that should calm even the most nervous of investors. Take a look below:

Lesson 10 of the Senior Exec Money Series: Insure Your Retirement

In a follow up to Lesson 8, medical expenses can derail your retirement – especially if you need skilled care.

Expanding on the third bullet point in the below article – long term care has come a long way from its origins.

New product developments may allow you to:

  1. Recoup part, if not all, of your paid premiums.
  2. Be flexible as to the type and location of care.
  3. Protect your life savings against a devastating event.

It’s not for everyone, and each situation is unique, but it’s worth considering.

Next time you’re reviewing your finances, consider your family’s health history and take a look.