Many people work their entire lives for the hope of a well-deserved and peaceful retirement. With increasing longevity and the rising costs of health care, however, it’s important to make sure not to exclude the possibility of inflation impacting your estate planning.
Your retirement funds might make sense now and your projected retirement savings could cover a good portion of your day to day living expenses, but if you have not fully incorporated the possibility of long term care expenses or the rising cost of inflation, your cost of living could spike significantly.
Consider that even a 3% increase in inflation would mean that the general cost of living can double within just 24 years. Even if you are not 24 years away from retirement, increasing longevity means that you might spend a few decades in retirement after exiting the workforce and relying on all of your retirement funds for that entire period. Health care expenses are also growing at a much faster rate than general expenses.
In fact, over half of retirees in a recent study said that they were concerned that rising health care costs and one of the biggest risks to their overall retirement security, and those risks are only expected to increase. For example, overall health care costs are anticipated to rise by 5.5% every single year over the next 10. Making a plan now and consulting with your financial and estate planning professional can help you to have a holistic approach towards your own financial future.