With all of the talk these days about financial bailouts, you might think that if your retirement finances should fall short, someone will come in and rescue you. Unfortunately, it doesn’t work that way--especially if you’re single or divorced.
At least couples going into retirement have a built-in support system; if one spouse should have a health care crisis, the other can step in and provide assistance. And that can be a big cost-saver if one of them needs Long Term Care. In fact, the journal Health Affairs projects that the cost of home health care will rise at an annual rate of 7.8%, much faster than the general increase in health costs.
That’s one reason why buying Long Term Care insurance is something that many singles may want to consider. Sure, it might seem to be more practical for a single to forego the insurance, spend down his or her assets and then let Medicaid pick up the tab for a nursing home or an assisted living facility. But as we noted a few weeks ago, when you go that route, you then give up a lot of control over the quality of your care. (Do you really want to take the chance of going into any nursing home?) And as a single or divorced person, remember that you have a greater chance of needing to rely on paid assistance at some point.
There are also other special matters that singles/divorced persons need to consider about retirement—and Connie Hicks will deal with them in our series report that will be broadcast on March 2.
Getting back to bailouts—perhaps you’re beside yourself because of the fact that your CDs or Money Market funds are paying next to nothing…and you were counting on more income from your retirement investments. Does that mean that you should look to higher-risk stocks or bonds to bail you out?
Well, that could make sense for some people, but if you go that route, you need to be careful. As General Electric’s recent decision to cut its dividend (for the first time in decades) shows, stock dividends are not sacred—no matter how long they’ve been maintained. And holding a high-yield “junk bond” won’t pay off if the company goes out of business.
So on March 16, Joe Collum will deal with the dilemma of how to go about boosting your income, without busting your portfolio in the process. With the economy in the state that it’s in, my guess is that interest rates won’t be going up for awhile. And I wouldn’t hold my breath waiting for Congress to pass a bailout for interest-deprived retirees….
Comments
another way for people that our single an retireing, would be to group together an start a small business. like farming an selling the items they grow in a open market. this would do afew things for them beside making some income. it get them to be healther by staying active which in turn should keep them in good health. an as a business they could get some health insurance to aid them when needed. I know this works cause i,am doing it. it took time to find people to group with on this ideal but we found some. main thing is to used your mind an you,ll come up with ways to make it when you retire. just keep in mind you made it to retirement so you can make it in retirement. just work it.
The main thing in retirement as I see it is to have your home paid for. then you can put funds into other forums to make some money. but if you know you have a place to live free an clear life can throw it,s best at you an you will hold up better. that,s what i did an I sleep very well at night. then the next thing was to have my broker find something that will pay me on a month by month that is tax free an he did. more thoughts to come if nbr really wants to have outside in put from those that have retire for the past 20yrs.