Reaching retirement is a significant milestone. You’ve worked hard to reach this point, so make sure you know what steps to take now. Whether you will spend time at home or travel around the world, it’s important to plan carefully for the retirement lifestyle you want in the years to come.

Develop a Retirement Income Plan
Review Your Insurance Coverage
Take Time to Plan for Your Estate
Seek Help from Professionals

Develop a Retirement Income Plan
You could live 30 years or longer in retirement, so you need to have a financial plan for making your money last. First, make a list of your retirement income sources and then estimate your expenses in retirement. Once you know this information, it will be easier to create a budget to use during your retirement years.

American Century’s free booklet Manage Your Investments During Retirement can help you create a long-term plan. It provides guidance on developing a budget for your retirement years and diversifying your portfolio to help meet your retirement income needs, although diversification cannot ensure against loss. There also is useful information on Social Security benefits and health care costs.

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Review Your Insurance Coverage
When planning for retirement, review your existing insurance coverage and decide if you need to make any changes. For example, you may want to add long-term care insurance to cover future expenses.

• Life insurance. As you grow older, your life insurance needs may change. For example, you may find that you want to reduce the amount of insurance if your children are now financially independent adults and you have enough retirement savings to support you and/or your spouse if one of you dies. You may want to talk to a financial planner to help assess your policies and needs. You also can access numerous life insurance needs calculators on the Internet.
• Know your retiree health insurance options. Many companies are reducing retiree medical benefits because of the expense. Be sure you understand the retiree health coverage available from your employer and plan for any additional costs not covered by the plan. The increasing cost of health care could have a significant impact on your retirement budget. Also, get to know the guidelines for Medicare eligibility and enrollment and consider whether you need Medicare supplemental insurance, which is referred to as a "Medigap" policy.
• Consider long-term care insurance. You also may want to plan for long-term care, such as nursing home or in-home care. Medicare does not cover most long-term care expenses, and Medicaid only covers them for people who have depleted their financial resources. Generally, the cost of a long-term care policy depends on your age, the dollar amount of daily coverage selected and the length of time you are willing to wait until benefits begin.
• Think about updating your car insurance coverage. Your coverage needs may be reduced if you have an older car or if you plan to drive fewer miles.

• Make sure you have a current will. Without a will or other way to transfer assets to beneficiaries, state law will determine how your assets will be distributed after you die.
• Verify your beneficiary designations. Keep in mind that distributions of money from your life insurance policy and employer-sponsored retirement plan, such as a 401(k), normally are handled separately from your will. Make sure your beneficiary designations are up-to-date for these accounts.
• Consider a trust for control over your assets. A trust is a legal entity that owns assets. Creating a trust offers many benefits and gives you control over the management and distribution of your assets during your lifetime and after your death.
• Protect your wishes for health care and finances. In addition to a will or trust, you also may want to think about adding powers of attorney for health care and finances. These documents protect your medical care and finances should you be unable to act on your own behalf. They help your loved ones be clear about how you want health care and money decisions handled.

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Seek Help from Professionals
It’s likely you’ll enlist the help of professionals, such as a financial planner and an estate planning attorney, to help with your retirement planning. Remember that American Century’s Investment Consultants also can provide education and assistance, at no additional charge.

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This information is for educational purposes only and is not intended as investment advice.

 

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