The high cost of living a long life

A friend of Ryan Thacker and Tyson Thacker was recently with a group of people, who were all baby boomers, and they were talking about their parents.

One of them said his parents were still living independently — his mother was 92 and his father was 96. Another friend said his mom was 91. Another friend's mother was 95 years old. And the last one said his uncle had just turned 104.

It's becoming more and more common to know someone who's thriving in their 80s or 90s or has celebrated their 100th birthday. With advances in modern medicine, longevity rates will most likely rise dramatically in the next 10, 20 and 30 years.

This is having a significant impact on the way baby boomers plan for retirement. Because today it's possible you could easily go 25, 30, 35 years or more without a paycheck.

Here are four ways that could help ensure your money lasts as long as you do.

Make your money generate income in retirement

When you retire you'll be in one of two camps. One, you're living off of your retirement savings. But every time you break out your wallet or write a check, you see your savings shrink. So, you're living in constant fear of running out of money in retirement. That's not good.

In the second camp, you've created several different sources of income coming in every month like clockwork. This income enables you to do all the things you wanted to do in retirement, like doing nice things for your kids and grandkids, making bucket list trips or buying that dream vacation home.

Unfortunately, generating income in retirement today is a lot more challenging than ever before. Sure, you can earn a higher interest rate on CDs and savings accounts. But you're still guaranteed to lose money when you consider inflation and taxes. Bonds aren't any better, and many people still fear losing their money in a volatile stock market.

The good news is there are a handful of other viable options that could help you achieve your income goals today — options you may not even know exist. You must look beyond the traditional income sources used by your parents and grandparents.

Create a plan to pay for healthcare

If you or someone you know has had to go to the hospital lately — even if it wasn't life-threatening — you know the cost of healthcare is through the roof. According to Health View Services, a healthy 65-year-old couple will spend $683,306 on healthcare expenses in retirement.

That's a massive amount of money to come out of pocket, especially when you're living on a fixed income.

One of the biggest mistakes people make is assuming Medicare will cover their medical bills in retirement. Unfortunately, that's not true. Medicare will cover some medical bills in retirement, but you still have to come out of pocket for some pretty big bills, including long-term care.

There's also a pretty good chance you'll need long-term care, too. According to the Office of the Assistant Secretary for Planning and Evaluation, 70% of Americans who reach the age of 65 will require some form of long-term care thereafter. And it doesn't come cheap.

The estimated cost for a private room in a nursing home is $108,405 per year according to the American Council on Aging. If you'd rather have a home health aide, you'd still be on the hook for more than $68,000 per year in Utah, according to Genworth.com.

The bottom line: don't underestimate the cost of healthcare in retirement.

Don't forget to account for inflation

Inflation has often been referred to as "the silent killer of retirement." And it's for good reason. Even when inflation rates are just 2%, your purchasing power could be cut in half in a handful of years.

While inflation rates have dropped in the past several months, Americans are still paying a lot more for everyday items. If you compare the prices on everyday items you bought in 2020 versus what they are today, it's staggering.

If you're still working, you've probably felt the pinch of inflation. But when you're retired and living on a fixed income, any increase in prices equates to an immediate sacrifice to your lifestyle in retirement. Unfortunately, some people could be forced to make an unthinkable choice between buying medicine or buying food.

Most people forget to account for inflation when they plan for retirement. They created their budget with today's prices — not what they may be 10, 20 or 30 years from now. This is a critical oversight. And it could cause you to run through your entire life savings far too soon.

Take advantage of tax planning

Most people assume they'll be paying fewer taxes in retirement. That's understandable because you're no longer earning a paycheck.

Unfortunately, that won't be the case for many hard-working Americans.

When you combine all of the income from your IRA and 401K withdrawals, social security benefits and other investments, you could be forced into a higher tax bracket. So you could wind up paying even more taxes in retirement.

To make matters even worse, the U.S. national debt is now more than $32 trillion, according to the Department of Treasury. At the same time, federal income tax rates are at 40-year lows.

It's important to recognize the government doesn't have any money of its own. The only way it can pay down the growing national debt is by raising taxes. That's why tax experts and economists are warning that higher taxes could be just around the corner.

If you want to save a lot of money in taxes when you retire, you need to take advantage of tax planning. Tax planning is looking forward — not backward. And a few simple strategies could help you save a fortune in taxes on your IRA and 401K withdrawals, social security benefits and other investment income.

How to make your money go a lot further in retirement

Everything in retirement is connected. You can't talk about longevity without talking about income planning in retirement. And you can't talk about income planning without talking about social security. And you can't talk about social security without talking about taxes. And the list goes on and on.

This is why it's critical you have a comprehensive financial game plan for retirement. And that's why the Thackers created the B.O.S.S. Retirement Blueprint.

This blueprint is customized for your specific situation, and it covers the most important pieces of the retirement planning puzzle, including taxes, healthcare, income, IRAs and 401Ks, social security, and more. This is the one tool that could help you make your money go a lot further in retirement.

Financial advisors typically charge $4,000 for a customized plan like this. But B.O.S.S advisers will do all of the heavy lifting for you, and they won't charge you a dime.

They've helped thousands of families throughout the Wasatch Front plan for a successful retirement, and they're confident they can help you, too. Their strategies are best suited for families who have saved at least $200,000 for retirement.

To schedule your initial analysis that could unlock the full potential of your retirement savings, click here.

About the authors: Ryan Thacker and Tyson Thacker are the president and CEO of B.O.S.S. Retirement Solutions. They are a five-time winner of Utah's Best of State Award and have six offices located throughout the Wasatch Front.

This is for illustrative purposes only, results may vary. Advisory services offered through B.O.S.S. Retirement Advisors, an SEC Registered Investment Advisory firm. Insurance products and services offered through B.O.S.S. Retirement Solutions. The information contained in this material is given for informational purposes only, and no statement contained herein shall constitute tax, legal or investment advice. The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice designed to meet the particular needs of an individual's situation. You should seek advice on legal and tax questions from an independent attorney or tax advisor. Our firm is not affiliated with the U.S. government or any governmental agency. Marketing materials provided by Infinity Marketing Services.

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