RISING COST OF HEALTH CARE – A 65-year-old couple will need an average of $280,000 in savings to cover the cost of medical expenses throughout retirement, not including long- term care.* It is understandable why retirees are concerned about the rising cost of health care. HIGHER RETIREMENT AGE – For most baby boomers, the full retirement age for Social Security is 66 and increases further to 67 for those born in 1960 or later. The increasing retirement age means you will have to wait longer for Social Security benefits to supplement your retirement savings. LUMP-SUM PAYOUTS – Receiving lump-sum payouts from pension plans or inheritances can raise concerns about the best way to invest the payouts and what, if any, tax implications may accompany them. INFLATION – Inflation, the rising cost of goods and services over time, can significantly affect your purchasing power. For example, if you withdraw $5,000 every month from your retirement savings, after 10 years of 3% inflation, $5,000 will have a purchasing power equivalent to $3,800.
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