As someone who's far from retirement age, you'd think I wouldn't spend much time thinking about that stage of life. But because I write about retirement so often, it's hard to not contemplate what it might look like for me from time to time.
For the most part, I consider my retirement goals fairly modest. And setting realistic expectations is an important thing in the course of retirement planning.
But there are certain aspects of retirement that worry me a lot. Here are a few concerns I'm taking steps to try to shake.
1. Rising healthcare costs
One big misconception about Medicare is that it's an inexpensive means of getting healthcare. Wrong. Not only will you pay to enroll in Medicare, but you'll also be subject to copays, deductibles, and other out-of-pocket costs that could take a huge bite out of your retirement income.
Consider this: If you're a Medicare enrollee who's admitted to a hospital in 2022, you'll pay a $1,556 deductible off the bat. Then, if your stay happens to exceed the 60-day mark, you'll pay $389 per day for the next month. Ouch.
Now there are steps you can take to make healthcare more affordable in retirement, like socking money away in a health savings account (HSA). But enrollment in one of these plans hinges on having a high-deductible health insurance plan. Because my plan doesn't qualify, an HSA is off the table for me.
I'm compensating by doing my best to max out my solo 401(k) plan. Since I'm self-employed, I can fund one of these plans and enjoy a higher annual contribution limit than what an employer-sponsored 401(k) might allow for. I figure the more money I sock away now, the more protection I buy myself if healthcare costs continue to climb — which they likely will.
2. The cost of staying busy
These days, downtime is a rarity for me. I routinely work 40 or more hours a week, and between my job, my school-aged kids, my attention-seeking dog, and my house that needs to be cleaned and maintained, I tend to have lots to do during the day.
That could change during retirement. And unfortunately, I don't tend to do well with sitting around doing nothing. As such, I'm concerned about the cost of staying busy.
That's another reason why I'm doing my best to max out my retirement savings and invest that money strategically. I want to buy myself as much flexibility as possible to stay occupied and avoid boredom.
3. Forced early retirement
Many people are forced to end their careers early when layoffs or health issues get in the way of their plans. As a writer who covers a range of topics and who can do her job from anywhere, I'm hoping a lack of work won't stop me from plugging away as long as I'd like. But I have no idea what my health has in store for me and whether retiring early is something I may have no choice but to do.
My solution? Wait for it — maxing out my retirement plan.
I know, I know, at this point I probably sound like a broken record. But to be clear, hitting my maximum allowable 401(k) contribution year after year requires some sacrifice.
If I weren't socking that money away in savings, I could do lots of other things instead — buy a larger home, replace my aging car with a newer one, or outsource more household tasks to free up hours in my week. Instead, I'm committed to maxing out my contributions in case things don't go according to plan on the retirement front.
Take control of your worries
The idea of retiring can be anxiety-inducing for a lot of people, especially because there are so many factors you can't control. If that's the boat you're in, boosting your savings rate could really help change your outlook.
I won't pretend that the simple act of maxing out my 401(k) completely negates the aforementioned worries. But it definitely helps me stay calm and positive in light of them, especially since I know I'm taking active steps to set myself up for the future.
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