Cortburg Speaks Retirement

Planning for Unexpected Costs in Retirement

June 12, 2024 • Miguel Gonzalez, MBA, AIF®, CPFA®, CRC® • Season 2024 • Episode 192

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 Discover the hidden costs that could derail your retirement plans! Join Miguel Gonzalez as he reveals the unexpected financial challenges you might face and how to safeguard your future. 

Cortburg Speaks Retirement - episode #192 

About Cortburg Retirement Advisors, Inc. 

Cortburg Retirement Advisors is a full-service, boutique financial planning firm - helping guide clients through turbulent and calm economies. Their goal is to help grow, protect, and preserve their assets from their first job through retirement. Cortburg’s “all in one house” capabilities mean that their experienced team can help with all financial needs - wealth management, estate and tax planning, group retirement, employee benefits, insurance, and retirement planning.    

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Welcome to Cortburg Speaks Retirement Podcast
with Miguel Gonzalez, MBA, AIF®, CPFA®, CRC®

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Welcome to Cortburg Speaks Retirement

An audio podcast about investing in the stock market, financial planning, money management and retirement planning.  Each Wednesday, we help investors at all stages of life learn how to potentially grow and preserve their money from first job through retirement.

Now here is your host, Miguel Gonzalez.

 HOST

Good morning and welcome to the CORTBURG SPEAKS RETIREMENT audio podcast.   

This week we're exploring crucial steps to safeguard your financial data as you gear up for retirement.

 

While protecting your financial data has always been important, it grows even more critical as you start planning to retire. 

Your retirement planning needs to incorporate more than just investments

Your open heart and your relatives can combine to threaten your retirement savings – savings you soon may need. Learn the true cost to your future before you write that well-intentioned check.

If you’re close to joining the other side of 50, you have probably noticed already that patterns are emerging about how you spend your money differently – including assets you set aside for retirement. And you might be feeling the pressure to further contribute to family finances in ways you hadn’t planned.

Unexpected Costs Will Happen

For example, are you prepared for:

·         Family members having a tough time financially will approach you because you are and remain responsible about saving and investing.

·         Your child needs a loan or your sibling needs help paying bills.

·         Your mother with dementia must go into assisted living but lacks long-term care insurance (LTC)

These costs are probably not built into your retirement plans.

Current Trends are Against You

Making things worse is that people live longer now so you need to plan as if you will live into your 90s, some 40 more years. And guess what?

·         Your parents may also live longer and need financial assistance in those years.

·         Your kids may boomerang after college or in early adulthood, moving home to live with you again for years.

And here are two other not-so-pleasant trends that most certainly do not prepare for:

·         Children who have addiction issues and need their parents to pay for the kids’ long-term rehab – care that sometimes comprises relapses and requires even more treatment. Parents face how long to keep paying for care, a cost rarely foreseen and included in any financial plan.

·         Many plan for organized philanthropy in retirement but instead give money to needy people in daily life. These gifts are nondeductible and don’t fit into planned charitable giving.

And how many of us ever really plan for divorce? But did you know that:

·         The Journals of Gerontology found that more than 1 in 4 people getting divorced in the United States are over age 50, and over half of those divorces happen after 20 years of marriage.

·         Pew Research data from 2017 found that the rate of divorce after age 50 nearly doubled over the past 30 years.

Divorce usually stretches both parties financially and creates more complicated domestic situations – often creating need for frequent financial help, as well.

Don’t Wait To the Last Minute

These issues only get more complex as retirement approaches, and with it your fears of outliving your money and becoming a burden on your family.

Few families discuss long-term care needs or even how to approach planning for elder care. Only a little more than a third (37%) of those 50 and younger believe they will need long-term care, for instance, when in reality 70% will eventually need it, according to the U.S. Department of Health and Human Services.

Out-of-pocket elder care for either you or your relative drains savings fast. Costs range from an average of $18 an hour for in-home care to some $10,000 a month for private care in a nursing home.

Alzheimer’s disease is another top fear. The study reports that nearly half of people 85 and older have Alzheimer’s or related dementias. No doubt most of those retirees prefer to remain in their own homes.

You need to know about the costs of retrofitting your home to accommodate an elderly relative, and what long-term care insurance does and doesn’t cover when under your roof. Your use of long-term care insurance to cover home health care often reduces the policy’s lifetime benefits, for instance. How much coverage remains for institutional care if you eventually need it?

When handling these very personal and complex issues, consider working with your financial professional, an elder care attorney and maybe a geriatric specialist. At the very least, think about whether you are becoming the family bank and if you should build the costs into your retirement plan.

Your Financial Professional

Remember this: when you plan for retirement – no matter how far away it might be – you need to model your financial expenses, anticipate unexpected expenses, think about your lifestyle choices, account for future inflation, and make various market assumptions. More importantly, these must be modeled within the confines of your risk profile and goals.

But when you run these models, you will undoubtedly struggle between your current and your future–retired–self. For your own well-being, favoring the future may be the appropriate choice. Trouble is, this is very hard to do.

Your financial professional can help you favor your future–self.

Make sure to visit our website, www.CortburgRetirement.com. Our site is filled with educational videos, eBooks, publications, and financial calculators designed to help you learn more about your finances.  As you search our site, send us a note regarding any questions you may have about any particular investment concepts or products. We will get back to you quickly with a thoughtful answer.

This is Miguel Gonzalez, Certified Retirement Counselor (CRC) and Managing Partner, with Cortburg Retirement Advisors signing off for this week’s educational podcast.  

 

DISCLOSURES  

Opinions expressed are subject to change without notice and are not intended as investment advice or a solicitation for the purchase or sale of any security. Please consult your financial professional before making any investment decision. 

All performance referenced is historical and is no guarantee of future results. All indices are unmanaged and may not be invested into directly.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

CRC conferred by The International Foundation for Retirement Education.

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advice offered through Private Advisor Group, LLC, a registered investment advisor.  

Private Advisor Group, LLC and Cortburg Retirement Advisors, Inc. are separate entities from LPL Financial.

Investing involves risk including possible loss of principal.

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Miguel Gonzalez, MBA, AIF®, CPFA®, PPC®, CRC®

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