There are some harsh realities we all have to accept as retirement is right around the corner!
Coming to terms with some harsh realities is not what most of us think about when it comes to retirement, but while it is not ideal to have your dreams crushed, it is also better to not be unprepared at all.
This is especially true when it comes to hard truths, as a lot of places will make retirement seem like a walk in the park: you have some money saved, maybe a retirement fund, and you can grow old with your partner in your home, surrounded by family. It sounds idyllic and amazing, and while it can be true for some, it is not the only face of retirement.
The world is full of surprises, and while retirement should not be one of them, what can happen that you are not prepared for can have you lined up for some really hard truths to swallow.
To help you prepare in advance for some of these revelations and ease the discomfort you may feel, we have prepared some of the hard truths about retirement that many face. Some could be pleasurable, others will be shocking, and we dare hope sobering.
Knowing what is ahead of you can help you adjust easier when the time comes in your golden years, so continue reading to find out the unfiltered hard truths of retirement!
Have you ever thought about any of these before? Let us know in the comments down below!
1. You will have to pay for Medicare.
One of the harsh realities of retirement comes in the form of Medicare. It may seem like since you have been giving part of your paycheck for years towards Medicare FICA taxes, you will be covered when it comes to the medical bills when you are older. Unfortunately, Uncle Sam is not going to foot your bill when you are older, and thinking about it in these terms is just a fantasy at the end of the day—a far-away dream if you will.
You will still have to pay for Medicare; part of the federal health insurance program will come from your paycheck, even if you are part of the program for people aged 65 and over.
Medicare A, which includes a lot of hospital costs, can end up being free for most seniors, but you will have to pay premiums when it comes to Medicare B. Medicare B is part of this scheme that covers outpatient services, and you will also have to pay for any other plans you may want to have in retirement.
It will not be as much as you have been paying before, but this is not one of those costs that will end up being cut from your budget. It will still be part of your monthly expenses, and you should not forget about any copays, deductibles, and coinsurances that you may have active; those do not disappear once you reach retirement either!
2. You will end up wishing you had saved more when you still could!
When we were in our late 20s and 30s, it seemed like retirement was going to be a thousand years away from us. However, we have also discovered that now that we are close to retirement, we feel like those times were just yesterday like we just blinked and found ourselves skyrocketing through our 40s and 50s. One thing that we never thought about back then was starting to save for our golden years.
You may think that you are covered for your retirement, but one of the hard truths about retirement is that a lot of retirees find themselves wishing they had started to save earlier than they did. It is one of the biggest regrets of American retirees, with the Transamerica Center for Retirement Studies conducting a review and revealing that about 78% of retirees wish they had saved more before they retired.
The harsh reality is that a lot of retirees will find themselves with a very limited monthly budget, which in turn will start thoughts about how they wish they had saved more often than they did and even started earlier than they did!
Another one of the related regrets is related to investing since that is another way to be sure that you have some more money to fall back on if everything goes to the worst. If you still have a few couple years until you plan to retire, make sure that you invest and save as much as you can, so that you can minimize this shock!
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3. You may not be able to totally rely on Social Security.
If you have been thinking that if it comes to the worst, you can easily rely on Social Security, you have to remember that there are millions of Americans who rely on it, and it is not the holy grail many believe it to be. The harsh reality of it is that while it has become the cornerstone of many Americans’ retirement, it is not enough for many to live to the level of comfort they desire.
Studies have shown that a lot of seniors who receive Social Security rely on these payments for more than 50% of their monthly income, with about 37% of males and 42% of females falling into this category. Sure, it also means that the rest is covered out of pocket, but there are also many seniors who end up relying completely on these paychecks from Social Security, and with how unreliable the economy and inflation have been recently, it is worrisome.
For a lot of Americans, the average senior Social Security benefit that they receive monthly, which averages out to about $1,800 a month, is not enough to be able to live the retirement life they have dreamed of.
Indeed, you can get by and have a modest retirement with the $22,044 a year you would receive from Social Security alone, but since more of us have been thinking about all the things we can do once retired, it will not be enough to cover all those expenses.
You can live by with just this amount, but the harsh truth is that you probably will not want to, so you should make sure you can save as much as possible until you retire.
If you want to discover more truths and myths about Social Security, make sure you give this book from Amazon a chance. It is both informative and easy to read, and it may just answer a lot of your extra queries!
4. Your expenses may be bigger than you have anticipated.
Since we have talked about income and things you may have to spend more money on than you anticipated, a lot of seniors face the harsh reality that they will end up spending way more than they ever thought of.
All of us will make up a general plan and note down how much we expect to spend each month so that we can make up our monthly budget, but a lot of Americans end up underestimating their spending before they retire. A recent survey found that about 39% of retirees spend way more than they imagined they would have to.
You should truly think about all these things you will have to pay for in retirement and then be realistic about your retirement dreams.
Many American retirees end up having to adjust their lifestyles when they retire, and if you do not want to end up being among those retirees who have to start cutting costs once they are retired, you should make sure that you plan accordingly. Or that you keep in mind this hard truth so that it does not take you by surprise!
If you are curious to see how you will fare in retirement, harsh realities aside, you should make sure that you check some things off your list. If you do not know about them already, make sure you check out these retirement milestones you should be reaching before you end up enjoying your golden years!