Carla Fried: Paying for retirement -- what they don't tell you

Carla Fried, on

Published in Business News

“A retired couple will need around $300,000 to cover healthcare costs.”

What they don’t tell you, Part 1. “That’s an estimate of total costs over a retirement that we’re figuring will last at least 25 years.” The number sounds so big, it’s impossible for many to plan for. But break it down into an annual or monthly healthcare cost in retirement, and it’s not nearly as scary.

What they don’t tell you, Part II. “Um, long-term care is an additional cost.” Any type of long-term care — it can be care you receive at home — is not included in the cost estimates that grab headlines. A clear-eyed understanding of the probability you will need long-term care during retirement, and for how long, is one of the most crucial pieces of a solid retirement plan that should be more front and center when discussing healthcare costs.

“Working longer is a smart way to stretch your retirement dollars.”

What they don’t tell you: “Good luck staying at your career job.” About half of people at least 50 years old will be laid off at least once, and it is rare that the next job will match their prior earnings. That can make it hard (or impossible) to keep saving at the rate you should, and often leads to using retirement savings earlier than planned.


Moreover, studies show that illness or a need to step in as a family caregiver causes many people to stop working earlier than they planned. A retirement plan that requires holding on to a high-paying job through your 60s is risky.

“Sure, you can stay put in retirement.”

What they don’t say: “Aging-in-place can be a financial mess for you and your kids (and grandkids).” Making clear-eyed decisions in your 60s about what will work best for an older you can have a profound financial impact on your entire family. It can also help you avoid social isolation as you age.

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