In the past, Florida and Arizona have been at the top of the list when it comes to the best places to retire in the United States. However, in 2016, this has changed. In a surprising turn, Wyoming has beaten out all other states on Bankrate.com’s list of best places to retire.
The strange jump to number one by Wyoming is due to its low cost of living, below-average crime and strong well-being scores in the region. States from the western region make up most of the top five:
There are many factors evaluated to analyze how well retirees will do in a state. Some of these are weather and climate, nearby amenities, cost of living, taxes, and more. Since retirees have a fixed income, looking at the cost of living is an important factor.
The five lowest ranked states for retirees are:
The reasons for the infamous retirement haven, Florida, getting dropped down to number 28 on the list relates to high crime and lower-than-average healthcare ratings. Arizona, the retirement haven in the west, did okay and ranked in at number nine.
Retiring to the beach always seems like a good idea in theory, but nine out of the worst 12 boarder an ocean or the Gulf of Mexico. Virginia is the only coastal state in the top ten states. Apparently retirees are focusing more on cost of living rather than scenery when looking at potential states for retirement. High cost of living could really take a toll on retirement savings.
When estimating how much money is needed for retirement, workers must keep in mind the rising costs of healthcare. In a recent study, it was found that retiree health care costs amount to 13 percent of annual spending for people 65 and older.
While it is usually recommended that retirees have enough saved up to replace 80 percent of their pre-retirement income, this may not be enough to cover health care costs these days. Household expenses in retirement are assumed to rise with overall inflation, which is about 2.5 to 3 percent per year. However, healthcare costs are assumed to rise about six percent in the next 10 years. This makes health care more of a concern when looking at finances.
Another cost factor is the increase in average life expectancy. People are living longer, thanks to health care becoming more advanced. While this is a great thing, it means retirees will likely end up spending even more out-of-pocket for health care. A 55-year-old male with an average life expectancy of 86 who ends up living to 88 will end up being responsible for almost an additional $70,000 in health care costs not included in retirement savings projections.
One way to combat the rising health care costs, is to open a Health Savings Account with Mountain West IRA. Contributions to an HSA are 100 percent deductible, just like with a Traditional IRA. It combines high deductible health insurance with a tax-favored savings account. The distributions used to pay qualified medical expenses can be taken out at any time.
Covered by qualified high deductible health insurance plan
Not covered by other health insurance
Not enrolled in Medicare
Not another person’s dependent
For those eligible and wanting to maximize their retirement savings, contact Mountain West IRA. Opening an HSA could help retirees pay less out-of-pocket for health care. Nobody can predict exactly how much they will need for health care expenses but it is better to have extra money available to cover these and other costs.
Some retirees find fulfillment in continuing to work after retirement. And it might not be such a bad idea to consider working part time after you decide to retire. There are numerous benefits that can come from it.
If you aren’t comfortable with where your retirement savings are sitting, part-time work could be a good option for you. Hopefully you set up some type of retirement plan whether it be a self-directed IRA or 401(k), but if not, you could be in the same boat as a lot of households between the ages of 55 and 64 that only have $12,000 in retirement assets. Continuing to work could help increase your nest egg and make retirement a bit more comfortable.
Do you currently have a mortgage? Almost half of homeowners age 62 and older have a mortgage. If you have to withdraw from your retirement account to pay off your mortgage, you’ll have to pay more taxes on your retirement distributions. Finding part-time work to pay off the mortgage will reduce your cost of living during retirement.
Sometimes you can be lucky enough to find a part-time job with health care coverage, which can help cover your health care costs. Medicare kicks in at 65, but if you decide to retire before you reach that age, you’re on your own. Setting up a Health Savings Account is another way to help take care of health care costs.
For decades, your purpose in life was your career. It can be daunting leaving that behind and trying to find a new purpose. Working-part-time can help ease that transition while helping to fill your days and bank account. Along with giving you a purpose, continuing to work can help keep you in shape physically and mentally.
A lot of people go through a downsizing period when retiring. Downsizing can include your living space, family heirlooms and other items. Something to keep in mind when downsizing is to focus on how each of these things will serve you in the future and not the importance they had for you in the past.
Living space is a primary area for downsizing during retirement. A house with multiple bedrooms and levels is great for a growing family, but not so much for a couple or individual. That much space isn’t needed and stairs may no longer be a viable option. Downsizing to a smaller house, condo or retirement home can be a great idea. Location also plays a factor. Living farther out of town can become a hassle especially if driving abilities become limited. Moving closer to the center of town also saves on gas, leaving more money available to spend on fun activities. Depending on your retirement budget, you could also consider moving to a new town, state or even country. This can cut down on costs depending on the location you choose. There are many areas that are considered great locations for retirees. They are often in warmer parts of the U.S., with lower costs of living and an abundance of activities.
We have a tendency to accumulate stuff throughout our years and are reluctant to let it go. Some of these things are family heirlooms and can be relinquished to family members now instead of waiting. If they just take up room, it might be time to hand them down so someone new can appreciate them. One way to do this is to let your children or relatives decide what they would like. Give them sticky notes and let them go through what you’re wanting to pass down. Go through the random stuff you’ve accumulated. If it doesn’t serve a purpose in this new phase of your life it can probably be let go. Donate these items to charity or hold a yard sale to make a little extra cash.
The term downsizing can be daunting and cast a bad light. But with retirement it really means having time to sort through your life, mentally and physically, and deciding what will suit you during the next phase of your life.
Ever wonder what you’ll see in the mirror in another 10 or 20 years? This service of having your image aged is now available online and offline. It is well worth the time and effort to have this visual representation because of how it stimulates the focus on your future. This is especially true if you are feeling unmotivated about planning for your IRA. The idea is you get to see what you will look like at different ages. Often it is possible to make incremental adjustments showing what you will look like every ten years (or whatever range/age you prefer), making it possible to see how it is a gradual process. As strange as it is to see different versions of yourself, it provides the realization that many more years are ahead.
There have been fascinating findings on how people respond when they see images of themselves at sixty, seventy or even one hundred years old. Realizing that time, gravity, stress and the joys of life impact everyone; it is no surprise the physical changes that take place. Visually it manifests with an overall relaxing of facial features, changes in fat distribution under the skin, more lines, typically longer ears because cartilage continues to grow while simultaneously the cartilage in our noses relax. Funny what happens—but it happens to everyone.
It was suggested that when people see these images of themselves it improves the desire to plan for the future and curbs immediate spending. This is great for saving. The fact is we don’t often think of an older version of ourselves, or the likelihood that we will be alive for several more years but it is possible that ninety is the new seventy.
A self directed IRA will give you a greater degree of control over your IRA that truly reflect your interests and values. Changing your investments at various ages gives you the ability to do what you want, when you want, with your money.
Take the time to get your image aged and then take action to ensure a comfortable future. Being able to envision your older self will help with your self directed IRA. For advice, contact Mountain West IRA.
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