Top 10 Best Countries to Retire 2023

When a senior loved one can finally retire, it can be emotionally gratifying. For many seniors, the newfound freedom afforded to them by retirement is an opportunity to think about and start making significant, positive life changes — and key among them is making a move. So, helping the loved one who’s made such a difference in your life purchase a home somewhere new can be an exciting and satisfying experience.

Whether your loved one is retiring abroad alone, or with family, moving internationally can be overwhelming. There are many factors that can make a difference when choosing a country, including:

Cost of living
Climate
Daily life
Language
Banking and currency
Residency-visa process
Healthcare
Safety and stability
Distance from family

Read on to learn the best places for Americans to retire abroad, what living abroad may mean for your loved one, and how these factors will form the foundation for a new life for them.

International Retirement: Tips for Getting Started

Moving internationally for retirement is a huge commitment, and finding the best places to retire abroad takes a lot of thought and care. Here’s how to get started:

Evaluate Expectations

Ask your senior loved one what’s most important to them when thinking about where they want to move, and pay close attention to what comes to their mind first. These early thoughts can indicate any strong preferences and deal-breakers they have, which can be helpful to create a shorter list of choices.

For example, if they say they want to live somewhere affordable, moving to Denmark or the Bahamas might not be the best option because these countries are expensive. If they don’t want to worry about shoveling snow off the driveway in the winter, they probably wouldn’t enjoy life in Japan. Also, if a medical condition discourages them from being in the heat too long; they can’t afford to live in a country like Spain that’s hot year-round. Maybe they are only interested in the best english-speaking countries to retire.

Regardless of their desires, it’s not selfish to consider how you and the rest of their family will factor into their new life abroad. For example, is it financially feasible for someone in the family to travel to check in on them? After all, they likely won’t be taking the family with them to their new home, so picking somewhere that’s less of a hassle to visit can be beneficial.

Distance moves can also bring an overwhelming sense of culture shock, especially regarding language barriers. If your senior loved one is adamant about moving to a country where the primary language is unfamiliar, help them learn some of the basics of reading and writing. Or, consider choosing a part of the country with enclaves that speak their native language. The process of absorbing a new language may ultimately dissuade them from moving to that country — and it’s better to come to that realization early.

Native commerce and banking can be a language unto itself. It’s important your senior loved one understands how to convert from the dollar to the new currency. They should also know the legal rules and regulations for banking properly before they step off the plane and realize they can’t make a simple purchase. It’s also a good idea to help them understand the country’s system of government and laws. In doing so, you may come to realize that they may be considering an unstable country. They shouldn’t have to live in an unsafe place.

Immerse Your Senior Loved One in the Environment

It’s one thing for your senior loved one to commit to living in a new country when they’ve been there as a tourist, but spending time in that place can help them understand what it is. So, consider working with your senior relative to help them find and rent a home for three to six months. Give them the space to immerse themselves in this new country so they can understand what it means to live there daily.

How easy is it to procure food they like? Is paying their bills more complicated than they want? Will they be able to afford a hospital visit? Does the country’s healthcare system offer good long-term care support and services available when they need them?

Being able to answer questions like these and much more confidently is easier when a person has lived through the relevant conditions. It’s one thing to read about the typical drive time commute from a web page. But it’s another thing entirely to frequently experience traffic delays that result in a late arrival to an important appointment. It’s also not good to learn that electricity is three times as high for a smaller home in the US.

Commit to the Process

Once you’ve done your research and helped your senior relative spend plenty of time in the country where they intend to move, help them tie up any loose ends in their domestic affairs. Take stock of their belongings, store what they might want to keep if they return home, and sell off the rest to afford them greater financial security. For anything they plan to take with them, make sure they have a plan in place that ensures their goods are transported abroad safely and can make it to their new home without hassle.

Have them contact their bank and phone providers to inform them of their upcoming address, ensuring that necessary documentation doesn’t get mailed to their old location. If they want to sell their home, help them put it up for sale early to ensure they’re not making payments on a property that isn’t their primary address.

Check to make sure their passport is renewed and consistent with their most recent personal information well before they move. It’s critical that they are able to establish legal residency through the visa process. Receiving full citizenship may also be necessary in some cases. Without completing these legal processes, they may not be able to live in the country long-term. Likewise, if they decide to take up a part-time job to pass the time and earn some income, they’ll likely be required to prove their right to work in that country.

Best Places for Americans to Retire Abroad

Now that you have valuable information resources to plan your senior loved one’s relocation, you can get to work helping them figure out where to live. But with over 130 countries to choose from, even when you know what to look for, it can still be overwhelming.

Here are some lists that can help you narrow down the choice that’s right for your senior loved one:

Top 10 Places to Retire Abroad

After carefully reviewing the factors above, here are ten countries that score high on the Retirement Genius International Index:

Costa Rica ($1,400/mo.)

Known for biodiversity
Low cost of living
Good healthcare
Loved by people with an active lifestyle
Bolstered by a stable system of government
Friendly people
Supported by a sound banking system
Close distance to the US

Panama ($1,100/mo.):

Great climate year-round
Good healthcare system
Low cost of living
Strong network of expats
English commonly spoken
For those who enjoy cosmopolitan living
Low taxes
Uses US currency
Offers a National Senior Discount Program

Spain ($1,200/mo.):

Good healthcare system
Inexpensive food
Low cost of living
Beautiful beaches and mild weather
Very diverse climate

Thailand ($600/mo.):

Low cost of living
Excellent cultural and metropolitan life
Strong networks for US expats
Known for promoting an active lifestyle
High degree of biodiversity

Peru ($2,000/mo.):

Exotic, vacation-style lifestyle
Low cost of living
Semi-arid, subtropical climate
Many activities to take part in

Portugal ($1,700/mo.):

Amicable people
Highly safe and stable living
Low cost of living
English commonly spoken
Beaches and cosmopolitan living
Diverse climate
Easy visa with Golden Visa program (requires proof of $1,200 in monthly income)

Colombia ($1,000/mo.):

Good healthcare system
Low cost of living
Beautiful tropical climate
High degree of biodiversity
Cosmopolitan lifestyle filled with exotic locals
Easy visa with proof of $2,500 in monthly income

Malaysia ($1,300/mo.):

Exotic lifestyle
Low cost of living
Excellent climate
English commonly spoken

Ecuador ($1,500/mo.):

Humid tropical climate
Low cost of living
Uses U.S. currency
High degree of biodiversity
Mix of metropolitan and rural living
Strong network of US expats
English commonly spoken
Excellent local food
Great senior discount programs

Mexico ($1600/mo.):

Low cost of living
Tropical climate
Great biodiversity
Number of beautiful beaches
National healthcare system
Close distance to the US

Top 5 Most Expensive Countries to Live (out of 132 countries):

Switzerland: Rent alone in many cities in Switzerland is over $2,200 with salaries to match — but your senior loved one is here to retire, so it may be too expensive for them.
Norway: Seniors should expect to spend between $2,200 and $4,300 a month to live in this Nordic country.
Iceland: A senior should expect to spend in the ballpark of $1,100 to live in Iceland — and that’s before rent.
Japan: Making a new home in the land of the rising sun will cost your senior loved one about $1100 a month before rent.
Denmark: Before rent, life in this Scandinavian country will set your senior loved one back around $1100 a month.

Best Countries to Retire on a Budget – Based on Region:

Europe

This country known for its sunkissed cities will cost your senior loved one around $590 a month before rent.

Slovenia: Living among this country’s beautiful landscapes before renting will cost a senior about $710 a month.
Montenegro: This Balkan country, a well-known tourist destination, costs $510 a month before rent.
Spain: Enjoying siestas and tapas in this country will cost the senior in your life $1,200 a month.
Italy: Life in the land of the Renaissance costs around $820 a month before rent.
Malta: This warm country with beautiful landscapes costs $810 a month before rent.

Latin America

Ecuador: Seniors can enjoy life among the Galápagos Islands for $490 a month before rent.
Mexico: Life in this vibrant country full of great beaches will cost about $450 a month before rent.
Argentina: Argentina’s daily living will cost about $430 a month before rent.
Belize: This country, beloved for its scuba diving sites, costs around $630 a month before rent.
Panama: Settling into this country infamous for its canals will cost $690 a month before rent.
Colombia: A senior building a new life in this country known for its coffee will cost about $400 a month before rent.

Asia-Pacific

Malaysia: Living in this country, well-known for its coastal locations, will cost about $460 a month before rent.
Indonesia: Relocating to Indonesia, home of various multicultural islands, will cost around $450 monthly before rent.
Thailand: This country full of natural wonder will cost around $600 a month before rent.
Borneo: Life in this country famous for its elephant and sun bear will cost around $490 a month before rent.
Vietnam: To live in this country where motorbikes rule the road will cost around $450 a month before rent.

Top 5 Countries for Safety and Stability (ranked by affordability):

Czech Republic: Life in this country respected for its safe communities and low crime rates will cost around $610 a month before rent.
Portugal: Living in this country known for low crime rates and a stable political scene will cost your senior loved one around $590 a month before rent.
Slovenia: Your senior loved one will spend $710 a month before rent in this country known for low crime rates.
Canada: Law enforcement is known for responding quickly in this country will cost around $890 a month before rent.
Austria: This country known for legal and political stability will cost about $920 a month before rent to live in.

Countries With Well-Established Senior Living Communities and Long-Term Care Services:

England: Seniors in this UK country benefit from comprehensive long-term care legislation and structure and will spend about $850 a month before rent.
Panama: Living in this country known for providing quality personalized care for senior residents will cost a monthly total of around $1,100.
Mexico: This country is respected for its wealth of long-term care options costs around a monthly total of around $1,600 to live in.
Japan: Life in this Asian country famous for its technology and entertainment and excellent long-term care will cost about $1030 a month before rent.
New Zealand: To live in this country known for picturesque landscapes and excellent long-term care services costs around $930 a month before rent.
Malaysia: Living in Malaysia costs a monthly total of $1,300 and provides seniors long-term care through welfare homes, private nursing homes, and care centers.
Philippines: This Asian country costs around $500 a month to live in before rent and has many excellent senior living communities.

Conclusion

Being able to retire overseas comes down to making personal choices that reflect what a person wants out of life and what they can afford. But most importantly, a choice as big as this one represents who they are as a person. So the key to helping them decide the right place to move is to do extensive research. In doing so, you can help them fully understand everything there is to know about this significant life change — before they make a move.

Selling your senior loved one’s existing life insurance policy as part of a life settlement is a great way to ensure financial security as they transition to their new life abroad. Visit our life settlements page if you’re looking to help overcome the upcoming financial challenges your senior loved one may have as part of a move abroad. You can start turning their outdated life insurance policy into cash they can use now by selling their policy to a dedicated life settlement provider.

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How to Choose the Best Investment Strategies for Retirement

As you near retirement, it’s incredibly important to have a wise investment strategy in place to ensure financial security during your golden years. During retirement, you’ll rely on your investments to provide a steady stream of income that covers your expenses and maintains your desired lifestyle. A carefully crafted investment strategy can make a significant difference in how well you can meet your retirement goals. Let’s explore how to choose the best investment strategies for retirement so you can prosper in the later chapters of your life.

Why Is a Retirement Investment Strategy Important?

One of the most important reasons you need a thoughtful retirement investment strategy is that you want to prosper during the years you’re not working. Having an investment strategy is one of the smartest ways to grow your wealth so you can have the retirement you’ve always dreamed of. Read on to determine how to create an investment strategy that’s right for your retirement goals.

How to Choose the Right Investment Strategy for Retirement

Choosing the right investment strategy can be complex, but there are a few key things to consider: your risk tolerance, retirement goals, and timeline. Let’s explore how these considerations can create a well-designed investment strategy that manages risk and maximizes returns.

Consider the risk you are willing to accept

Your risk tolerance can set the pace for your investment strategy. Some people are more comfortable with risk than others. Start by assessing your risk tolerance to help determine the appropriate mix of assets for your portfolio.

Determine when you would like to retire

In addition to your risk tolerance, your timeline for retirement can impact your investment strategy. The longer you have to retire, the more risk you can afford to take because you have more time to recover from market downturns. Alternatively, if you have a short timeline, you may want to focus on more conservative investments to protect your principal.

Hone in on retirement goals

Before finalizing your retirement investment strategies, you need to determine your retirement goals. Things you’ll want to factor into your retirement goals:

Desired lifestyle
Ideal retirement age
Financial obligations (healthcare, long-term living plans, dependents, etc.)

Knowing what you want out of retirement can help you set the pace for a retirement strategy that aligns with your specific needs.

Finally, as you begin to craft your retirement investment strategy, remember this: working with a financial professional can unlock insights you may not realize were possible, such as income annuities, life settlements, reverse mortgages, and more. Reach out to a trusted financial professional to ensure your investment strategy aligns with your retirement goals.

What Are the Best Income Strategies For Retirement?

There are several income strategies to consider during retirement, including passive investment income and withdrawing funds from investments over time. Take a look at the strategies below and consider incorporating these ideas into your retirement income strategy. And, as always, be sure to consult with a financial professional before utilizing any of these strategies. The ideas below are meant for educational purposes only and should not be used as professional advice.

Utilizing passive investment income

Passive investment income refers to the income generated by investments that require minimal effort or time to maintain, such as rental properties, dividend-paying stocks, and ETFs. However, passive investment income can also come from the interest and dividends generated by your investments.

One of the primary benefits of utilizing investment interest and dividends as a source of passive income during retirement is that it provides a reliable income stream without the need to sell investments. Instead, you can reinvest the earnings generated by your portfolio to grow your nest egg or use them to cover your expenses during retirement.

To maximize the passive investment income generated by your portfolio, it’s essential to invest in high-quality assets that offer a steady stream of interest and dividends. This can include bonds, dividend-paying stocks, and mutual funds or ETFs that focus on income-producing assets.

Withdrawing funds from investments

Another income strategy is to withdraw funds from investments over time, rather than relying solely on interest and dividends. This approach involves selling investments as needed to supplement your retirement income. The advantage of this strategy is that it provides flexibility to adjust your income needs based on market conditions and your personal financial situation. However, managing withdrawals carefully is essential to avoid depleting your portfolio too quickly.

Utilizing your retirement accounts

Retirement accounts such as IRAs and 401(k)s can provide a reliable income stream during retirement. These accounts offer tax benefits and can help you accumulate funds over your working years, providing a reliable income stream during retirement.

Selling your life insurance policy

In addition to the income strategies mentioned above, there’s a little-known income strategy called a life settlement. It works for people who no longer want their life insurance policy and who are interested in selling it to a third-party buyer, typically a life settlement provider. The life settlement provider purchases your life insurance policy and assumes responsibility for the premiums (meaning you no longer have to pay premiums). They provide you with a lump-sum payment that’s typically four times the cash surrender value. Upon your passing, the life settlement provider receives all or a portion of the death benefit instead of or in addition to your beneficiaries. You’re free to use the life settlement proceeds on whatever you’d like, including retirement expenses.

How to Plan Your Retirement Investment Strategy

Planning your retirement investment strategy can feel like a daunting task, but it’s a critical process to make sure you can live your retirement dreams.

Here’s how you can get started:

Define your retirement goals. The first step in planning an investment strategy for retirees is to define your financial goals. This can include determining how much income you will need during retirement, when you plan to retire, and what lifestyle you hope to maintain during retirement.
Assess your risk tolerance. Staying true to your risk tolerance can help you determine the types of investments that align with your goals and — most importantly — your comfort level.
Consult with a financial advisor. Consulting with a financial advisor can provide valuable guidance when planning your retirement investment strategy. A financial advisor can help you develop a personalized investment plan that aligns with your goals, risk tolerance, and retirement timeline.
Choose a wise investment strategy. Once you have defined your goals and assessed your risk tolerance, you can choose an investment strategy that aligns with your objectives. This may include investing in stocks, bonds, mutual funds, or a combination of these assets.
Diversify your portfolio. Diversification is an essential component of any retirement investment strategy. By investing in a variety of assets, you can spread your risk and reduce the impact of market fluctuations on your portfolio.

It’s important to remember that investing for retirement is a long-term process that requires patience, discipline, and careful planning. By taking the time to define your goals, assess your risk tolerance, and choose an investment strategy that aligns with your objectives, you can build a retirement portfolio that provides financial security and peace of mind. Reach out to Retirement Genius for more tips, tricks, and retirement solutions today!

Disclaimer: Retirement Genius does not offer financial advice. This material has been prepared for informational purposes only and should not be relied upon for financial advice. Retirement Genius urges you to consult with your own tax or legal advisors before entering into any transaction.

Passive Income Strategy: 4 Ways to Generate Passive Income in Retirement

The idea of building passive income has become a popular wealth-building strategy in recent years, though the concept has been around for generations. As you prepare for retirement or if you’re currently retired, passive income can be an excellent strategy that provides you with extra income during your golden years. Learn more about passive income, including what it is and how to begin generating your own streams of passive income so you can enjoy retirement to the fullest.

What Is Passive Income?

Passive income is a financial strategy to earn money without your active involvement. Instead of getting paid for your time spent, a passive income strategy makes money regardless of how many hours you spend on it. From owning rental properties to receiving dividends from stocks, there are many ways to make money without getting paid for your time. While passive income doesn’t require as much effort as typical earned income, you still need to keep tabs on your ventures to ensure they perform the way you want them to.

Why Build Passive Income?

For retirees, building passive income can provide additional streams of income that require less of your time. Most folks entering retirement are ready to work less and live more. Passive income can provide more financial stability and flexibility, and even help you retire early so you can live out your retirement dreams. Let’s dive into why you should start building passive income streams before — or even during — retirement.

Financial Stability

One of the main reasons people decide to build passive streams of income is to have financial stability. Passive income streams provide a steady source of income that’s not tied to a traditional job, which can provide financial consistency during recessions, job loss, and other unexpected life interruptions.

It’s important to note that passive income can require time, effort, and even financial investment upfront to set up. However, if done successfully, passive income earners reap the rewards by making money while they sleep.

Flexibility

In addition to financial stability, passive income can also provide flexibility in your life. Whether you want more flexibility in how you earn a living or you want to spend more time pursuing your life passions, generating passive streams of income can help you create more time and financial freedom to live the life you want. Here are a few ways that passive income can give you more flexibility:

Reduced reliance on traditional work. Passive income streams provide a steady source of income that is not dependent on a traditional nine-to-five job. This creates more flexibility in how you choose to spend your time and reduces the pressure to continue working in a traditional job.
Ability to pursue interests and hobbies. If you’re able to cover your basic living expenses with passive income streams, you could have more time and financial freedom to pursue side projects and hobbies that you’ve always dreamed of trying during your retirement.
More opportunities to travel. Passive income retirement streams can provide the financial means to travel more frequently and for longer periods of time. This can be especially appealing for retirees who want to see the world and experience different cultures.
Ability to give back. With more financial freedom, retirees may be able to give back to their communities or support causes they care about. This can be a fulfilling way to spend time in retirement and make a positive impact on the world.
Lower stress levels. Financial stress can be a significant burden for many retirees. By building passive income streams that cover basic living expenses, you can reduce your financial stress levels and enjoy your golden years.

Early Retirement

Another major reason to pursue passive income streams is that they could lead to early retirement. By building enough passive retirement income streams to cover your living expenses, you can retire from traditional work earlier than you might have thought possible.

However, to build passive income for early retirement, it’s important to have a clear understanding of your living expenses, how much passive income you will need to cover them, and what streams of passive income you can create to cover those expenses. You’ll also need enough time to set up streams of passive income, so the sooner you start the earlier you’ll see returns.

4 Ways to Generate Passive Income in Retirement

When it comes to how to generate passive income, there are several strategies to consider. Here are some ways retirees generate passive income.

1. Annuities

One way to generate passive income during retirement is through annuities. An annuity is a financial product that pays out a fixed sum of money at regular intervals. They’re designed to provide you with guaranteed income for the rest of your life. Annuities are a strategic way to earn passive income with extra benefits, such as tax-deferred arrangements, premium protection, and the ability to customize your contract to fit your specific needs. While there are other passive income streams with higher rates of return, annuities can be a steady, secure way to supplement your retirement income.

2. Real Estate

Another popular way of earning passive income is by investing in real estate. While this strategy is more of a long-term play, it can pay off in the long run if you start early enough. Here are a few real estate strategies that can earn you passive income:

Rental properties: When you rent out a property that you own, you can earn a steady stream of rental income each month. Finding the right property to rent out and purchasing the property — as well as ongoing maintenance and management — requires time and investment that pays off with a reliable source of passive income.
Real estate investment trusts (REITs): REITs are investment opportunities that allow you to jointly own income-generating real estate, such as apartment buildings, office buildings, and shopping centers. By investing in a REIT, you can earn a share of the income generated by the real estate holdings without having to own and manage the properties yourself. REITs can be a good option for investors who want exposure to real estate but prefer a more passive approach.
Short-term/vacation rentals: Renting out a property on a short-term basis through a vacation rental platform can generate passive income. This particular real estate strategy requires more active management and maintenance of the property since it needs cleaning and preparation for each new guest. Retirees who are comfortable with a more hands-on approach may enjoy this passive income strategy.

3. Dividend Stocks

Dividend-paying stocks are another way to create a reliable source of passive income in retirement. Dividend stocks are stocks of companies that distribute a portion of their earnings as dividends to their shareholders. When you buy a share of a dividend stock, you become a part-owner of the company and are entitled to a portion of the company’s profits.

Dividends are typically paid out quarterly, though some companies choose to pay monthly or annually. The amount of the dividend payment is determined by the company’s board of directors and can vary depending on the company’s financial performance and other factors.
Companies that pay regular dividends are often more established and stable, which can make them a safer investment option for retirees.

4. Private Equity

Private equity investments can provide passive income in retirement through regular distributions from the fund’s profits. Private equity investments involve buying shares in privately held companies that are not publicly traded on a stock exchange. Private equity firms typically purchase these companies to improve their operations, increase their profitability, and then sell them for a profit. These kinds of investments tend to be high risk, high reward.

Since private equity investments can have a higher payout, it’s important to keep in mind that they carry higher risks — and sometimes higher fees — than other investment options. Since these investments cannot be easily bought or sold on a public market, they’re not liquid; they’re typically held for a longer period of time (compared to publicly traded stocks), and the success of your investment depends on the performance of the underlying company. There’s no guarantee that the investment will generate a positive return. For these types of investments, make sure to talk with your financial advisor for their advice.

Tips to Maximize Passive Income

Now that you’re aware of a few passive income strategies that may work for you in retirement, it’s important to understand additional tips and tricks to maximize your passive earnings.

Start Early

The earlier you start generating streams of passive income, the sooner you’ll begin to see the fruits of your labor. Starting early and investing even small contributions to dividend stocks, REITs, or rental properties can add up over time. Starting early also allows you to take advantage of the power of compounding, which can significantly increase your returns over time. The biggest benefits of starting streams of passive income early is not only the ability to retire sooner, but also the financial freedom you’ll experience during your golden years.

Diversify Your Portfolio

The only thing better than a passive income stream is multiple income streams! Diversifying your portfolio across different asset classes can help reduce risk and maximize returns. Consider investing in a mix of stocks, bonds, real estate, and other alternative investments to spread out your risk and increase your chances of generating passive income.

Work With a Financial Advisor

Consulting with a trusted financial professional can help you identify opportunities to maximize your passive income streams and create a customized investment plan that aligns with your financial goals and risk tolerance. They can also help you monitor your investments and adjust your strategy as needed to ensure that you are on track to meet your retirement goals.

Generating Passive Income in Retirement: Key Takeaways

When it comes to prospering in your later years, passive income can be a brilliant tool for financial freedom and flexibility. As you approach retirement, take advantage of the effective strategies outlined above for growing your assets through passive income. From annuities and real estate investments to dividend stocks and private equity, diversifying your portfolio across different asset classes can help you maximize your returns and minimize your risks in retirement. By taking a proactive approach to generating passive income, you can enjoy a comfortable retirement and achieve your financial goals.

Get in touch with a financial advisor to create a passive income strategy that works for you, or connect with us here at Retirement Genius for more tips and tricks. Remember, it’s never too early or too late to start building passive income streams. Start building more wealth for retirement today!

What Are the Top 7 Questions About Retirement That You Should Ask Before You Retire?

Planning for retirement is like getting ready for a long road trip. You meticulously plan out the routes you’ll take, the cash you’ll need for your adventures, and, if you’re truly prepared, you’ll make sure to add extra time and resources for unexpected bumps along the way.

As you begin thinking about the retirement road ahead, your mind may be buzzing with questions: Do I have enough saved? How much is enough, exactly? And how will I afford the big expenses in retirement? As you ponder these questions, allow us here at Retirement Genius to provide some encouragement and enlightenment. Let’s explore some of the most common and pressing questions to ask when retiring so you can plan the adventure of your life. Let’s go.

The 7 Questions to Ask When Retiring

While you likely have dozens of questions about retiring, let’s start answering the most pressing ones surrounding finances and healthcare.

1. How Much Do I Need to Have Saved for Retirement?

How much you’ll need for retirement depends on many factors: what living expenses will you have later in life? What health costs will you need in the future? Do you own your home? What financial obligations — like utilities, property taxes, transportation, and insurance — will you have as you age?

Since retirement is not a one-size-fits-all journey, it’s difficult to provide a recommendation on how much you should save for retirement. However, to give you a ballpark figure, experts generally recommend having 7 to 13 times your salary saved by the time you turn 65. This percentage works best under the assumption that you’ll only draw 4% throughout a 30-year retirement.

As you begin calculating how much you may need for retirement, remember that these figures are meant to serve as a recommendation, not a rule. You may need more or less for your particular circumstances. If you don’t already have an estimate of retirement expenses, you may want to work with your financial planner to create a realistic and personalized retirement plan. Factor in the following common retirement expenses when putting together your estimated retirement costs:

Housing costs
Utilities
Healthcare expenses
Insurance
Taxes
Food and groceries
Transportation
Travel and leisure
Debt payments
Home care and assistance
Personal care
Funeral and end-of-life expenses
Emergency fund
Inflation

2. How Do I Avoid Running Out of Money After Retiring?

One of the most common fears retirees have is running out of money during retirement. It makes sense that retirees are concerned about depleting their life savings. Inflation, rising healthcare costs, and expensive long-term care options are sure to make anyone nervous about the nest egg they’ve saved for decades.

To ease your worries, you can put the following strategies to work:

Diversify your portfolio. The stock market has its downturns, which is why you want to make sure you have a well-diversified financial portfolio. Work with your financial advisor to create a balanced investment strategy protected against sharp market turns.
Delay collecting Social Security. The longer you wait to collect Social Security, the more income you can guarantee later in life. If possible, hold out until age 70 to begin collecting your benefits.
Withdraw 4% (or less) annually. Stick to the conventional wisdom of withdrawing a small percentage of your savings every year. This can help you avoid running out of cash.
Work part-time. Taking a part-time job or working within the gig economy not only earns you extra income but can keep your mind sharp and your body in motion.
Refinance large debt. While it’s ideal to have major debts, like mortgages or loan payments, paid off before retiring, sometimes that’s not possible. If the market rate permits, you can refinance large debt to lower interest rates.
Stick to a budget. Don’t let your spending habits get out of control in retirement. Take advantage of senior discounts when shopping or eating out. Key in on how much you can spend every month — then stick to it!

3. How Will My Taxes Change When I Retire?

Just like there’s no one-size-fits-all savings target for retirees, there’s no retirement bracket for taxes; each retiree is taxed differently, depending on their retirement income.

There are a few key considerations to keep in mind as you determine how much you’ll be taxed during retirement:

Pre-tax retirement accounts will be taxed upon withdrawal. Withdrawals from your 401(k) and Traditional IRA will be taxed as ordinary income. This can push you into a higher tax bracket.
After-tax Roth accounts will not incur any taxes when withdrawn. Withdrawals from Roth IRAs and Roth 401(k) are not taxable, since you already paid taxes before putting these dollars into your Roth account.
Social Security benefits are (typically) not taxed. Social Security retirement benefits are typically not taxable unless you collect an income of more than $25,000 as an individual or $32,000 as a couple.
RMDs can influence your tax bracket. Required Minimum Distributions (RMDs) generally count as ordinary income, which can affect your tax bracket.

Work with a savvy tax advisor and/or financial planner to stay up-to-date on the latest tax changes, understand how your retirement finances will be taxed, and avoid being taxed more than necessary during your golden years.

4. Can My Spouse and I Retire at the Same Time?

Retiring alongside your spouse can be a beautiful goal to work toward. However, before you both leap into retirement, there are a few logistical factors to work through.

The first is your age. If you and your partner are different ages, you may consider staggering your retirement dates to ensure that you both qualify for Social Security, pensions, retirement withdrawals, and more.

Healthcare is another important — and expensive — factor to consider when planning your and your spouse’s retirement. Depending on your health, one or both spouses may need to continue working to maintain health insurance until you qualify for Medicare to cover medical costs.

Finally, you’ll want to consider your financial readiness. If one spouse feels more anxious about the finances, they may want to continue working a few more years before jumping into retirement. This can add money to your retirement savings and delay withdrawing too much from savings for another few years.

As you enter into conversations with your spouse about timing your retirement, keep an open mind and know that flexibility is the key to a successful plan.

5. Do I Need to Be Debt-Free Before Retiring?

While being debt-free is certainly ideal when entering retirement, not everyone can feasibly eliminate their debt before it comes time to retire.

A great place to start is to analyze your debt and determine what, if anything, to do about it before retiring. For example, many folks on the brink of retirement still have their mortgage to pay off. Keeping the mortgage — or even refinancing it — can make sense instead of dipping into your savings to pay it off before you retire. Work with your financial planner to assess and manage your debt before retiring.

6. What Is the Best Way to Replace My Employer’s Health Insurance After I Retire?

There are a few options for health insurance when you retire: COBRA, Medicare (plus Medigap), private health insurance, VA health benefits, or Medicaid. Depending on your eligibility for these programs, you may have to pay for coverage, so it’s important to factor those costs into your retirement budget.

7. How Will I Pay for Large Expenses When I’m Retired?

There are a few financial strategies you can use when paying for large expenses when retired:

1. Rely on retirement savings.
If you feel comfortable with the amount of money you have saved up for retirement, then paying large expenses shouldn’t be a major issue — even after you stop working.

2. Consider selling your life insurance for a payout.
If you no longer want or need your life insurance policy, you could sell it to a licensed life settlement provider for a one-time cash payout. Life settlements can provide a windfall of cash — on average, four times the cash surrender value of a policy. There are typically no restrictions on what you can use the cash for, making it a viable option for retirees needing to pay for a large expense.

3. Use investment income.
Income generated from investments — like dividends from stocks or interest from bonds — can help cover expenses.

4. Dip into your retirement emergency fund.
As you put together your retirement plans, make sure to have an emergency fund established for large ticket items you’ll need after you retire.

5. Consider annuities.
Annuities are financial products that offer a guaranteed income stream for a specific period (often the remainder of a senior’s life). They can serve as a source of income for larger expenses in retirement.

Make Sure You’re Asking the Right Questions About Retirement!

As you meticulously plan for every twist and turn on the road to retirement, it’s increasingly important to ask as many questions as possible before you quit working. Asking the right retirement questions — and getting answers from qualified experts — can help you plan for every swerve and detour during retirement. As always, Retirement Genius is here to answer any questions you may have about retirement. Whether you want to better understand how life settlements work or explore reverse mortgages, we’re here to share retirement wisdom. Finally, remember that as you plan for this exciting chapter of your life, the journey to retirement can be as rewarding as the destination itself. Enjoy dreaming — and planning — the adventure of your life that’s waiting ahead.

How to Calculate Your Personal Net Worth: A Complete Guide

As the golden years approach, many seniors find themselves reviewing their financial standings and wondering if they’ve saved enough to retire comfortably. One important factor when evaluating personal finances is understanding your personal net worth.

For folks who are making retirement plans, it’s an important time to take stock of your personal net worth to help you gain a clearer picture of your financial health. In this guide, we’ll dive into how to calculate net worth and why it matters to know your personal net worth. Let’s get started!

What Is Your Personal Net Worth?

First, it’s important to address this pressing question: what is a personal net worth statement? A personal net worth statement shows the difference between what you own (your assets) and what you owe (your liabilities). It’s commonly used as a financial metric to provide a snapshot of your overall financial health.

Formula for Personal Net Worth Calculation

You may be wondering, “What is my personal net worth?” Here’s a very simple formula to help you calculate your net worth:

Net Worth = Total Assets – Total Liabilities

While there are no hard and fast rules to determine whether you have the “right” net worth, having an estimate can help you make informed decisions about your retirement planning, investment strategies, and debt management.

Why Is Knowing Your Net Worth Important?

Knowing your net worth is like having a financial compass that guides you on your journey to a comfortable, enjoyable retirement. Here are a few key reasons why understanding what your net worth is can help you in your 50s, 60s, and beyond.

Retirement Planning

One of the most important reasons you should know your net worth — especially as a senior — is for retirement planning purposes. Your net worth is a critical component of the retirement planning process. It helps you estimate whether you have enough savings and assets to retire comfortably. If your net worth falls short of your retirement goals, you may need to adjust your financial savings methods.

Investment Strategy

Another critical reason to know your personal net worth is for an investment strategy. Your net worth can influence your investment choices. A solid net worth might allow you to take more calculated risks or explore additional investment opportunities. On the other hand, a lower net worth may warrant a more conservative approach to protect your retirement nest egg.

Debt Management

Part of knowing your personal net worth is understanding how much you owe on assets. Getting ahold of how much debt you have can motivate you to prioritize debt reduction before retiring.

Estate Planning

Understanding your net worth can help you evaluate potential estate tax liabilities and determine how your assets will be distributed to your heirs and beneficiaries.

Financial Goals

Keeping track of your net worth can help you set and monitor financial goals. From paying off your mortgage to building an emergency fund, your net worth serves as a benchmark for measuring your progress.

What Should Be Included in Your Personal Net Worth?

As you gear up to calculate your net worth, it’s important to gather the value of your assets and liabilities. Taking stock of everything you own and owe can take some time. To save you some trouble, here’s a list of what you should include in your personal net worth:

Liquid Assets

Liquid assets are a type of financial asset that you can readily convert into a case or use for expenses. These typically include:

Cash: This includes the money you have in checking and savings accounts.
Certificates of Deposit (CDs): Include the current value of any CDs you hold.
Money Market Accounts: The balance in your money market accounts is considered a financial asset.
Other “Cash Equivalents”: Investment accounts that are easily converted to cash within three months or less, such as Treasury bills.

Investments

In addition to liquid assets, you should gather the value of your investments. Investments have the potential to grow in value over time and should be considered assets. Here are some examples of investments that fit in this category:

Stocks: The current market value of your stock investments.
Bonds: Include the current market value of any bonds you hold, such as government bonds or corporate bonds.
Mutual Funds: The value of your mutual fund investments.
Retirement Accounts: Include the balances in your retirement accounts like 401(k)s, IRAs, or pension plans.
Real Estate Investment Trusts (REITs): If you have investments in REITs, include their current value.
Life Insurance Policy: Include the cash surrender value or life settlement value of your life insurance policy.
Annuities: If you’ve invested in an annuity, include its value as an asset.

Physical Property

Calculate how much physical property you own to gain a full picture of your net worth. Here’s a list of physical property assets to include in your net worth calculation:

Real Estate: Include the current market value of your primary residence, vacation homes, rental properties, or any other real estate you own.
Vehicles: Include the estimated value of your cars, motorcycles, boats, or recreational vehicles that you own.
Jewelry and Valuables: Items like jewelry, artwork, antiques, and collectibles should be included, but it’s essential to get them appraised for accurate values.
Home Furnishings and Appliances: While not typically as valuable as real estate or vehicles, the collective value of your home furnishings and appliances can add up and should be included.

Loans and Debts

Finally, you’ll want to evaluate how much debt you have as you calculate your personal net worth. Here is a list of loans and debts you should include:

Personal Debt: Include any personal credit card debt or loans that you owe.
Student Loans: If you have any outstanding student loans from college, you should include that amount in your liabilities.
Mortgages: If you have a mortgage on any properties, include that in your list of liabilities.
Vehicle Loans: Include any outstanding loans you owe on your vehicles (cars, trucks, boats, scooters, etc.).

As you’re gathering the value of your assets and debts, it’s important to be as accurate as possible. You may need a professional appraisal for real estate, jewelry, and/or vehicles. Consider consulting an expert for valuation.

How Do You Calculate Your Personal Net Worth?

Now that you have an understanding of what to include in your personal net worth, here’s the best way to calculate your personal net worth.

1. Determine what assets you have

First, you’ll want to gather the financial values of every asset you own. Consult the list above for a comprehensive checklist of what to count as assets, or take a look at this cheat sheet:

Financial Assets: List all your financial assets, such as cash, savings accounts, certificates of deposit, money market accounts, stocks, bonds, mutual funds, retirement accounts, and cash equivalents. For each item, note its current market value.
Physical Property: Document the current market value of your physical property, including your primary residence, vacation homes, rental properties, vehicles, jewelry, artwork, antiques, collectibles, home furnishings, and appliances. For real estate, consider obtaining a professional appraisal, and for valuable items like jewelry or collectibles, seek expert valuation if needed.

2. Identify any liabilities

Next, compile a list of outstanding debts and financial obligations (also known as your liabilities). This should include any mortgage loans, auto loans, credit card debt, personal loans, student loans, outstanding medical bills, etc.

3. Subtract liabilities from assets

Finally, subtract your total liabilities from your total assets to get the value of your personal net worth. If you need help calculating your personal net worth, you may want to use an online personal net worth calculator that can guide you every step of the way.

Your net worth will either be positive, indicating that your assets exceed your liabilities , or negative, suggesting that your debts surpass your assets. By understanding your net worth, you can make informed decisions about retirement planning, investment strategies, and debt management, ensuring that you are on the right financial path as you prepare for retirement. Now, the next time you find yourself asking, “What is my net worth?” you’ll have a better understanding of how to calculate it.

As you set out on your journey toward the golden years, understanding your net worth can help you gain financial clarity and allow you to pivot before retirement. When calculating your personal net worth, remember that Retirement Genius is here to help. Whether you have questions about calculating your assets or want to learn more about selling your life insurance policy to gain a financial windfall, Retirement Genius has the resources to point you in the right direction. Give us a call today, and we can chat about your future: 866-602-5000.