Financial Topics You Need to Research Before You Retire

Your retirement years can be some of the best years of your life. They can also be some of the most stressful if you aren’t prepared. If you want to be able to enjoy your retirement and not worry about having to come out of it, there are some financial topics you need to research beforehand.

Taxes in Retirement

Despite some of your retirement savings being pretax dollars when you put them in accounts, that isn’t going to be the case when you pull money from them. Social Security benefits, traditional IRAs, 401(k)s, 403(b)s, tax deferred annuities, and pensions are all subject to being taxed when you receive the money from them. Money put into a Roth IRA, on the other hand, can be withdrawn from tax-free, though you’re limited to contributing $6,000 per year and contributions can’t be deducted from your taxes. HSAs are also free from being taxed. Contributions can be tax-free dollars and funds used to pay for medical expenses aren’t taxed either. Know what will and won’t be taxed so you can make sure you have enough saved up to account for taxes in your expenses.

How to Sign Up for Medicare

Once you turn 65, you qualify to sign up for Medicare. Medicare comes in different sections, Parts A-D, which cover things like hospital, medical, and prescription drug coverage. Medicare Advantage plans (Part C) cover both Parts A and B, but Part D is separate. Medicare Advantage Part D plans are available from almost every major insurance provider. Like regular insurance, Medicare helps cover the cost of healthcare expenses, but that doesn’t mean you’re getting free healthcare. Research what Medicare does and doesn’t cover, and how much is covered so you can get an idea of what your healthcare expenses might be like in retirement.

Long-Term Care Expenses

As you age, you’ll experience a decline in your health. At some point, you may find yourself needing long-term care. This can come in multiple forms, ranging anywhere from in-home nursing assistants to living in nursing home care centers. Long-term care is expensive. It can easily cost anywhere from $50,000 to over $100,000 each year just for care, to say nothing of additional living expenses. If you’re concerned about having to pay for long-term care, consider purchasing long-term care insurance to help offset some of those costs.

Researching financial topics can help you be prepared for retirement. Before you get to that point, research topics like retirement taxes, how to sign up for medicare, and long-term care expenses. Once you have the information you need, you can develop a strategy for facing the costs associated with retirement so you can live comfortably in your golden years.

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