The S&P 500 gained more than 16% last year despite an unprecedented global shutdown.

But you shouldn't plan your retirement based on double-digit returns.

You should aim to spend up to 4% of your nest egg per year in retirement, according to financial advisor Winnie Sun. That percentage can drop, however, based on several factors such as if your home isn't paid off or if you have high health-care costs, Sun said.

The strategy also assumes that you have a balanced portfolio, focusing more on bonds and cash-type investments for your short-term needs. This allows the stocks in your portfolio to grow for the future, according to Sun.

Check out this video to see a few different case studies of how much spending money you'll have if you retire on $1 million.

More from Invest in You: 'Predictably Irrational' author says this is what investors should do during pandemic Coronavirus forced this couple into a 27-day quarantine on their honeymoon cruise How to prepare for a family member with COVID-19

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How much money you'll have in your monthly budget if you retire with $1 million - CNBC

Many senior living providers have been pivoting to wellness in their operational models, and memory care is no exception.

But given the particular needs of memory care residents, fostering a wellness-first approach is not easy. Bringing wellness into memory care involves engaging multiple stakeholders, specific training, transforming physical spaces, and integrating technology.

Most importantly, memory care providers pivoting to wellness are reassessing their approaches toward caring for residents in their charge. That is according to leaders with Senior Star and Sunshine Retirement Living, who spoke during a recent webinar hosted by Senior Housing News.

The tendency of memory care providers used to be approaching residents from the perspective of their cognitive decline, instead of as people who still have much to give, and plenty of life to live, said Shadoworee Betts, senior vice president of clinical services at Senior Star. The Tulsa, Oklahoma-based senior living providers operates a portfolio of 12 communities in five states. Memory care is a particular area of expertise; company founders Bill Thomas and Bob Thomas have served at the national leadership level of the Alzheimers Association, and Betts sits on the National Alzheimers Association Dementia Care Roundtable.

We like to look at the person holistically these individuals, prior to the diagnosis, had fulfilled lives and careers, Bettssaid.

Kena Phillips, regional vice president with Sunshine Retirement Living, agrees. Based in Bend, Oregon, memory care is offered in 23 of the providers communities. In Dec. 2020, the company announced an expanded rollout of a wellness-focused memory care program, including Montessori-style programs, new sensory experiences and technology, and other elements.

Phillips believes that wellness is a complementary holistic component to clinical and health care, and helps create environments where memory care residents can thrive, creating situations where they have more life in their days.

We want to get away from identifying individuals as a disease process, and remember that they are a sum of their parts, she said.

Hiring the right people not just having the proper staffing levels is essential to bringing wellness into memory care.

It involves hiring for the type of culture providers plan to implement having the necessary soft skills and approachability to get residents to engage with frontline staff, Betts said.

If a job candidate has those skills in place, then odds are solid they have the purpose required for a career in memory care, and then providers can train them in the needed skills. For instance, how to assist residents, identify what agitates them, and learn de-escalation techniques if an episode occurs.

We spend a lot of time on the process of hiring right, first, she said.

New hires at Senior Stars memory care facilities spend a lot of their onboarding and early weeks on the job in sensitivity training, including simulations to provide a clearer sense of what it is like to live with cognitive decline. This leads new staff members toward being more patient and empathetic toward residents.

The training is continuous, and involves engaged leaders who observe and are willing to teach in the moment. Leaders provide associates with the flexibility to make on-the-spot decisions and empower the lives of the residents that theyre serving.

When youre able to address what [staff are] asking you to address, you create raving fans from your associates. That allows them to be a little bit more successful in an engagement process, Betts said.

Sunshine completely immerses its frontline staff in the care process, and solicits their advice on developing care plans, building on a teams collective experience, Phillips said.

This approach helps staff forge bonds with residents as well as each other, and gives all team members from CNAs to housekeeping staff agency in the care of residents.

We encourage a whole team approach, and we encourage that no one department is above another department, she said.

After lagging behind other industries for years in embracing technology, Covid-19 shattered the barriers holding the senior living industry from incorporating tech platforms into their operations.

Technology poses unique opportunities, and challenges, for memory care settings. But providers are pleasantly surprised by how residents are embracing tech, in particular.

Sunshine implemented virtual reality capabilities within its memory care settings, and Phillips had doubts if it would take root.

When we first started talking about this, I thought, Oh, no. This is not going to be pretty, she said.

Instead, memory care residents have embraced virtual reality goggles and headphones. The VR tech allows for near-unlimited scenarios, from skydiving and virtual tours of foreign destinations, to watching musicals and touring museums and other cultural institutions.

Its an amazing tool that I would have never embraced, if our wellness team had not been pressing me to do that, she said.

Sunshine also uses video technology to assist in calming agitated residents. The provider uses recordings to capture primary caregivers and loved ones and, if they cannot be contacted when an event occurs, plays the recordings as a second option to calm residents.

Phillips indicated that Sunshine has only scratched the surface in how deeply it can ingrain technology into its memory care operations. In the future, she sees potential for creating video scrapbooks, and even more opportunities for personalized virtual experiences that can lead to positive outcomes.

I encourage everyone to not get in the trap that I was in, [convinced] this wont ever work, she said.

Senior Star is bringing in virtual reality capabilities for its memory care neighborhoods, and intends to train staff and residents families on the technology, in addition to residents, Betts said.

She sees Senior Star using VR as a tool to give staff and residents families, in particular, a semblance of what residents in cognitive decline live with on a daily basis.

Theyre used to being caregivers. Theyre not used to being the person that has the disease; VR equipment will allow us to help with those experiences, she said.

Senior Star is exploring partnering with a third-party provider on an artificial intelligence-based fall detection platform, which can predict when a resident is most susceptible to falls, and eventually reduce the likelihood of an event occurring.

Betts believes that gathering data will help Senior Star identify the contributing factors behind falls, put measures in place to reduce the chances of a fall in the future, and explain to families why loved ones are falling and the measures being taken to prevent future incidents.

Senior Star plans to launch the partnership in early 2022. The provider is also exploring additional engagement technologies for residents and associates to more positively engage in their environments.

It provides great reassurance for our family members, Betts said.

Senior living has adapted wellness-based design trends for years, and the pandemic has accelerated the adoption.

This is especially true of memory care, where building designs are a foundational component of an operators care programming. Sunshine designs its buildings in a figure-eight layout with seating areas and watch stations throughout, in order to keep residents engaged should one decide to walk around, Phillips said.

Design innovations extend to exteriors, as well. Sunshines courtyards incorporate bright colored flowers in landscaping as engagement tools and wayfinding devices, and wide walking paths with more seating areas.

To encourage stimulation, Sunshine also has spaces designed to resemble offices with desks where residents can work or nurseries where residents tend to babies.

Kitchen stations are stocked with melamine plates and service ware for residents to safely wash dishes and feel a sense of purpose.

The operator constantly assesses these stations and their frequency of use, going so far as to review residents life histories to customize how these stations are designed, and where they are laid out.

Its important for the physical plant to be easily modifiable, if you will. We cant move walls, but we can move areas, she said.

Senior Stars memory care design incorporates many of the same principles as Sunshine, with the courtyards situated in the middle of the neighborhood for engagement and connections. These areas are laid out similarly to a neighborhood outside a community. Seating stations are designed to resemble those at bus stops, parks, or schools. Senior Star brings in cars for residents to wash, as an engagement tool.

When [families] choose to bring their loved ones to memory care, theyre not prepared at times for what theyre going to see. We try to take that trauma away from them and make sure our environment is inviting, she said.

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Inside the Wellness-Driven Memory Care Models of Senior Star, Sunshine Retirement - Senior Housing News

Today, its common for Americans to spend two, three or even four decades in retirement. This means people have ample time to relax and achieve a bucket list of dreams. However, the flip side is retirees need to ensure they have enough savings to last through their lifetime. One complicating factor is inflation is a fact of life, and it can result in meaningfully higher expenses over time.

As youve likely seen in recent headlines, inflation rates are the highest theyve been in many years. Living costs have risen 5% over the past 12 months ending in June, based on the Consumer Price Index significantly higher than the 1% to 2% annual increases weve gotten used to seeing over the past decade.

Inflation creates challenges for all consumers, but it can be particularly difficult for those who are retired and living on a limited income. Higher inflation can throw off the assumptions for regular expenses reflected in your retirement plan. Its unknown whether this uptick in living costs will persist, but you should prepare for the impacts of inflation regardless.

Here are a few things to know and do:

-- Keep it in perspective

Todays inflation rate of 5% is high by recent standards, but nowhere near a record. We may be a long way from seeing an extended period of high inflation like we had in the 1970s and 1980s, where inflation in the United States peaked at 13.5%. Since 1982, inflation has only been higher than 5% in one calendar year (1991) until now. While another decade-long inflation threat is unlikely, living costs in the near-term may continue to rise at a fast pace.

-- Revisit your expenses

If the cost of essential items, such as food, gas, plus the cost of discretionary expenses, such as travel, are busting your budget, you may need to explore ways to cut back. Can you buy food in bulk to save money? Should you reduce your casual driving to cut down on gas? Are there other discretionary expenses you can forego, at least for now? Addressing these questions today could prevent you from spending down your assets too quickly.

-- Adjust your investments

Is your portfolio properly positioned to keep pace with inflation? It may make sense to keep a portion of your assets invested in stocks. Over the past 30 years, the Standard & Poors 500, a benchmark of U.S. large cap stock market performance, gained, on average, more than 10% annually, well above the 2.3% average annual inflation rate over that same period. Earning higher returns on money you may need 10 to 20 years in the future should help it grow sufficiently to meet inflated income needs at that time, but a large portion of your portfolio should still be invested more conservatively to protect it from market volatility.

-- Look at other options

If you are experiencing financial strains as living costs rise, you may want to consider other options, such as a part-time job or consulting. Even in retirement, it is important to be flexible to react to changing circumstances that may affect even your best-laid plans. Be sure to check with your financial advisor to discuss your most attractive options to manage todays inflation risks.

Ellie Tobin Stubbs is a financial adviser with Ameriprise Financial Services Inc. in Barre.

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Stubbs: Combatting inflation threats in retirement | Business Vermont | rutlandherald.com - Rutland Herald

Have you considered the order you'll withdraw your retirement income? Doing so in the incorrect order could cost you hundreds of thousands of dollars.

A 2020 Northwestern Mutual study found that 71% of U.S. adults admit their financial planning needs improvement. However, only 29% of Americans work with a financial advisor.1

The value of working with a financial advisor varies by person and advisors are legally prohibited from promising returns, but research suggests people who work with a financial advisor feel more at ease about their finances and could end up with about 15% more money to spend in retirement.2

A recent Vanguard study found that, on average, a $500K investment would grow to over $3.4 million under the care of an advisor over 25 years, whereas the expected value from self-management would be $1.69 million, or 50% less. In other words, an advisor-managed portfolio would average 8% annualized growth over a 25-year period, compared to 5% from a self-managed portfolio.3

SmartAssets no-cost tool simplifies the time-consuming process of finding a financial advisor. A short questionnaire helps match you with up to three local fiduciary financial advisors each, legally bound to work in your best interest. The whole process takes just a few minutes, and in many cases you can be connected instantly with an expert for a free retirement consultation.

Advisors are rigorously screened through our proprietary due diligence process.

Being aware of these five common blunders when withdrawing your retirement income can help you find peace of mind, and avoid years of stress.

1. Not Starting With Your Investment Income

Withdrawing from your investments first gives your retirement accounts more time to compound interest. If you dive straight into your 401(k) or IRA, you could cost yourself years worth of income in retirement savings.

Whether you have mutual funds, a brokerage account, ETFs, stocks or bonds, theyre all taxable, so youll have to pay capital gains taxes on withdrawals. Some investments also require you to pay taxes on distributions each year, like some mutual funds. Check with a fiduciary financial advisor to see if this is the case for your accounts.

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All of the financial advisors on SmartAssets matching platform are registered fiduciaries, who are legally bound to act in your best interest. If your advisor is not a fiduciary and constantly pushes investment products on you, use this no-cost tool to find an advisor who has your best interest in mind.

2. Claiming Social Security Benefits at 62

If you want your maximum Social Security benefits, youll need to work until your full retirement age.

But benefits at age 62, 66 or 67 are not your maximum benefits. The maximum Social Security retirement benefit kicks in at age 70. If you claim before, you're not getting your full entitlement.

Each year after full retirement, your payout increases by a certain percentage based on specific criteria. To maximize this strategy, we recommend holding off until you are 70 payments will be the highest possible, increasing by 8% each year you wait.

While this strategy will help you collect the highest Social Security benefit, every situation is different. Consult a financial advisor to figure out how and when Social Security benefits should factor into your unique retirement plan.

3. Withdrawing From Your 401(k) and IRA Before RMDs Kick In

You can start withdrawing money from your 401(k) when you turn 59 1/2, but that doesn't mean it's a good idea. The law doesn't require you to start taking Required Minimum Distributions until you turn 72, so this is time your money can keep growing with compound interest.

4. Tapping into Your Roth Before Exhausting Other Options

Put off withdrawing money from your Roth IRA as long as possible.

You paid taxes up front so you can take money out of your Roth IRA and it wont count as taxable income.

Your Roth IRA also will continue to grow tax-free as you tap into your other accounts. Since a Roth IRA holds after-tax funds and the IRS doesnt need to tax it again, you also dont need to take Required Minimum Distributions. This account can keep growing for as long as you don't touch it.

The Best Way to Plan Your Withdrawals

Determining the optimal sequence to withdraw money from your retirement accounts is different for everyone, so we recommend speaking with a financial advisor.

Voya Financial found that 79% of people who use an advisor said they know how to pursue achieving their retirement goals. The study also found that 59% of those who use an advisor have calculated how much they need to retire, while 52% established a formal retirement investment plan.5

Chances are, there are several highly qualified financial advisors in your town. However, it can seem daunting to choose one.

Our no-cost tool helps makes it easy to find the right financial advisor for you. Now you can get matched with up to three local fiduciary investment advisors that have been rigorously screened for regulatory disclosures and to confirm their licenses. The entire matching process takes just a few minutes.

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2021 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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The Worst Way to Withdraw from Retirement Accounts - Yahoo Finance

What You Need to Know

Two-thirds of women in a new study say they now invest savings they have outside of retirement accounts and emergency funds in the stock market, a 50% increase from 2018, Fidelity Investments reported Friday.

At the same time, many women may still be keeping significant savings in cash or bank accounts, earning minimal interest and therefore missing out on thousands of dollars in potential earnings, the study found.

CMI Research conducted a survey in July among 1,200 American women and 1,200 American men, all 21 or older with a personal income of at least $50,000 who are actively contributing to a workplace retirement savings plan, such as a 401(k) or 403(b). Fidelity was not identified as the sponsor of this study.

Fidelity said it was already seeing a notable uptick in 2018 in women getting more hands-on with their finances, and that momentum has continued as the pandemic has disproportionately affected women.

In fact, it said, the events of the past 18 months catalyzed even more women to make their finances a priority, through building up emergency savings, creating or updating financial plans, and making the move from saver to investor.

Still, a great deal of opportunity remains for those who are not yet investing, as well as for those who may still be keeping significant savings on the sidelines. Taking proactive steps may bode well for the future, Fidelity said.

An analysis of the investing behavior of its retail customers, comparing the annualized return of assets of 5.2 million self-directed retail accounts from January 2011 to December 2020, showed that on average, women not only realized positive returns on their investments, but also outperformed their male counterparts by 40 basis points.

Over the last year, Fidelity said, it has seen an increasing commitment to saving and investing for the future among its own customers as well:

Fidelity expects this momentum to continue, as 9 in 10 women say they plan to take additional steps to get more engaged in the next 12 months. But women will need additional support and education to help reframe how they think about investing, it said.

Although half of the women in the study said they have become more interested in investing since the start of the pandemicand 42% said they now have more to invest, only 41% purported to be comfortable with their investing knowledge.

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Fidelity Finds 50% Jump in Women Investing Outside of Retirement - ThinkAdvisor

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By: Zach Catanzareti, Staff Writer

Michael Annett has been in and out of his No. 1 JR Motorsports Chevrolet over the last few months due to a leg injury. And following his third comeback behind the wheel Saturday at the Charlotte Motor Speedway Roval, this time was different.

Announcing his retirement from full-time NASCAR competition on October 6, Annett now has four races left on his racing career in the Xfinity Series.

Despite an injury adding stress to his final weeks, the 35-year-old has a goal in mind: End it on a positive note.

I dont want to go out on the run I had at Richmond, Annett said, finishing 22nd in that race. It just wasnt a very good run. I feel good enough to be in the car, Ive been with JR Motorsports for five years, Pilot Flying J for 20-some years. I just feel like I owe it to them to finish it out. And I want to.

Finishing 27th Saturday at the Roval, Annett was far from pleased with that result. However, it wasnt due to ill feelings behind the wheel in regards to his leg injury.

Personally, I felt fine, he said. [The leg] got pinched about halfway through, I started to feel it and then you just quit thinking about it. Your adrenaline gets a little higher. I dont know a whole lot about it, I just felt it about halfway and I dont feel it right now [postrace]. Thats a good thing.

Replacing Josh Berry in the car last-minute, Annett was confident that the tricky road course of Charlotte wouldnt be an issue of physicality.

The first time I came back was at Watkins Glen so I knew it wouldnt be that bad, he said. I didnt want to have to come back at a track I was terrible at [laughs], I would have rather been at an oval. But we fought hard all day. I was eyeballing a top 10 on the last restart and got myself turned.

The roller coaster ride of hardship since July gave Annett time to access his future. And though many assumed his leg injury was the deciding factor in retirement, he reveals that it was not.

Its something I thought of even before I got hurt, he said. The injury gave me a lot of time to think about it. I just felt it was time to do something else. I wasnt as excited going to the airplane each weekend like I used to be. Its time to let these younger guys have a shot.

Ive dealt with an injury before when I broke my sternum [in 2013] and sat out for three months. Its definitely tough when I thought I was coming back and then had to get back out. Those ups and downs were tough. It was really cool watching Josh [Berry] win the other week and seeing my guys celebrate. Thats what they deserve.

As for whats next following the season finale at Phoenix, the Iowa native has plenty of ideas.

Every hour I come up with something different, he said. From going to Charleston and starting a charter fishing company, Im all over the place. Well have some time to think about it.

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Michael Annett Wants to Leave on a Positive Before Retirement - Kickin' the Tires

Former world No. 21 Leonardo Mayer absolutely enjoyed his time at home and he felt it was the right to retire. Mayer last played at Wimbledon, where he lost in the qualifying first round. On Thursday, 34-year-old Mayer announced he was retiring.

"I had a kind of internal battle. Even when I came back from Wimbledon I told myself: Im going to stop playing for a while and see how I feel, said Mayer. So I gradually wound down from playing and, honestly, I felt fine.

With plenty of barbecues and things to do at home, I said: Thats it, everything Ive done has been perfect and Im not a tennis player anymore. Tennis brought me so much joy and its been part of my life since I was little.

But I feel that its time to end this wonderful period of being a player. Thank you to my wife Milagros, who was part of all my experiences and provided vital support. We have three beautiful children and they are the biggest trophies.

Mayer captured two ATP titles and achieved a career-high ranking of No. 21. "Yesterday, I went to the gym while my children were having a nap, but only for a while, so that my shoulder doesnt hurt, said Mayer.

Ive started living as a stay-at-home dad, taking care of the house, looking after the garden... I cook a lot of barbecues, eat whatever I want, take care of the kids; all the things I never used to do because I had to look after myself.

I can even play football matches now. Ive had a good career. Yes, there are a few specific matches I could have won or played better in, but thats just the way it is. Thats how you build a career and sometimes its not easy.

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Leonardo Mayer: Barbecues and fun time at home pushed me into retirement - Tennis World USA

Key Points

You've probably heard that Social Security won't pay you a high enough monthly benefit to cover all of your living expenses in retirement, and that you'll need to save money independently to manage your various bills. Many people consistently put money in an IRA or 401(k) plan for this reason -- to ensure that they have savings to tap once their careers come to an end.

But there's another type of retirement savings plan you might be missing out on. And actually, it's an account that offers even more tax benefits than you'll get with an IRA or 401(k).

Image source: Getty Images.

Not everyone is eligible to contribute to a health savings account, or HSA. To qualify, you must be enrolled in a high-deductible health insurance plan, and the definition of that changes every year.

But if you are eligible for an HSA, it pays to contribute as much money as you're allowed to for one big reason -- or actually, three. HSAs offer a host of tax benefits -- more so than IRAs and 401(k)s.

With an HSA:

When we compare HSAs to IRAs and 401(k)s, it's easy to see why they make so much sense. Traditional IRAs and 401(k) also offer tax-free contributions, but investment gains are tax-deferred and withdrawals are taxed. Roth IRAs and 401(k)s offer tax-free gains and withdrawals, but no tax break on contributions.

Technically, you can use an HSA at any time to pay for qualified healthcare expenses. But if you manage your HSA wisely, it can serve as a retirement savings plan.

The funds you put into an HSA never expire, so you can carry that money all the way into retirement. Meanwhile, many seniors find that their largest monthly expense is healthcare. And so having a dedicated account to pay for those costs can come in very handy.

With an HSA, you can withdraw funds during retirement to cover your Medicare premiums and copays. You can also take withdrawals to cover services that Medicare won't pay for, like dental care and eye exams (though Medicare Advantage plans commonly cover these services, original Medicare does not).

Best of all, if you happen to enter retirement with so much money in an HSA that you don't need to spend it all on medical expenses, once you turn 65, there's no penalty for taking an HSA withdrawal for non-healthcare purposes. The worst that'll happen is that you'll be liable for taxes on your withdrawal. But in that case, all you're really doing is making your HSA comparable to a traditional IRA or 401(k).

Socking money away in an HSA could put you in a stronger position to tackle what could be your greatest retirement expense. If you're eligible for an HSA, it's a good idea to do two things:

Many seniors struggle financially specifically because their healthcare bills become unmanageable. An HSA could help you avoid that fate and set you up for a more comfortable, stress-free retirement.

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Are You Missing Out on This Triple Tax-Advantaged Retirement Savings Account? - The Motley Fool

Make sure these financial landmines don't destroy your golden years.

Pat yourself on the back. You saved up, did the 401(k) thing, built up a nice portfolio. Maybe youve got a million, maybe more. Now its time to chill out, travel, play with the grandchildren, whatever. The point is, youre done working.

And that could be the scary part!

Without that regular paycheck, youve got to make sure your savings last the rest of your life. But that could be two decades, perhaps more. You dont want to deplete your nest egg, and you certainly dont want to spend sleepless nights worrying about it.

But youve got this, and weve got your back. You have plenty of weapons in your retirement arsenal, its just a matter of learning about them and deploying them.

Here are some big retirement risks and how to address them.

What it is: Longevity risk is the risk that youll outlive your savings.

Americans are living longer lives than ever before. In fact, the life expectancy in the United States is about 77 years, and folks on average are retiring before age 65. Thats a lot of nonworking years to make sure your savings last and if you stay healthy, it could be a lot longer.

Severe fluctuations in the stock market could put a dent in your portfolio, and there are unplanned expenses: illness, housing repairs, a sick pet, you name it. And dont forget inflation, keeping the price of everything on the rise.

What you can do: To create additional monthly income, consider annuities or a reverse mortgage. To conquer inflation, devote a portion of your savings to stocks and other investments likely to rise in value.

How an adviser can help: If youre unsure of how much money youll need in retirement, talk to a financial adviser. A good adviser will help you define your post-retirement income, spending and plans for the future. Then, theyll develop a clear plan.

The value of working with a financial adviser varies by person, but according to an independent study, people who work with a financial adviser feel more at ease about their finances and could end up with about 15% more money to spend in retirement.

Use this free matching service to connect with three qualified financial advisers in your area in five minutes. The first appointment is typically free.

What it is: Market risk, also called systematic risk, is the risk the entire stock market declines, taking your savings with it.

Thats why investing in stocks, although theyre an important part of your overall savings, can be intimidating. While stocks have historically gone up over time, sudden declines of 10% or more arent uncommon. At the wrong time, that could be devastating.

What you can do: Dont put all your eggs in the stock basket. Diversify. Ideally, your portfolio should be a mix of stocks, bonds and cash equivalents. Your ideal personal mix depends on your age, risk tolerance and other factors.

How an adviser can help: As you plan and invest for retirement, make sure youre developing the right mix of investments. Talk to an investment professional. Even if youre sure youve got it down pat, a review by an outside expert never hurts.

What it is: The risk that health care expenses devour more of your savings than you planned.

Today youre healthy, but unfortunately, sooner or later, especially as you age, the odds increase that youll need expensive medical treatment. Medicare will help, but it wont pay for everything. For example, Medicare doesnt pay for long-term nursing home stays, which cost an average of more than $7,000 a month.

According to a study by Fidelity Investments, todays average 65-year-old couple will incur about $300,000 in medical expenses during their retirement years.

What you can do: The best defense to offset medical expenses is to be proactive by eating well, exercising and getting regular checkups. You could also consider long-term care insurance, which pays all or part of long-term nursing care. But it doesnt come cheap and gets prohibitively expensive as you pass retirement age.

Another way to save for health expenses is with a health savings account (HSA). If you have high-deductible health insurance and are otherwise eligible, youre not taxed on HSA contributions, your account grows tax-free and withdrawals for qualified medical expenses are also untaxed.

You can also explore Medigap and Medicare advantage plans. Both can lower your post-retirement health care costs.

How an adviser can help: Meeting potential health care challenges is critical and planning for them is complicated. Connect with an expert adviser for help.

What it is: Inflation is when the cost of goods and services rises over time. It affects everyone, but its particularly dangerous for retirees, who lose the ability to earn more even as the cost of living goes up.

Consider this: In 1980, the average annual wage was $12,513. The average amount retirees need to fund their retirement was $125,134.

The difference between then and now? Thats inflation.

What you can do: Buy stocks, which carry some risk but which have historically greatly outpaced inflation. Real estate is also an inflation hedge, as are investments like TIPS (Treasury Inflation-Protected Securities), which adjust to keep pace with inflation.

How an adviser can help: New ideas and techniques to defeat inflation are being developed all the time, so make sure your bases are covered by talking to an expert, especially when you can get matched with an adviser in five minutes for free.

What it is: The risk from changing tax rules and policies.

Whether youre still working or youve already retired, its important to do everything possible to keep income tax and other taxes from eroding your savings.

The federal government is continuously changing tax rules. For instance, the SECURE Act, passed in 2017, ushered in several changes affecting retirees. And more changes could be in store during the Biden administration.

What you can do: However and whenever the IRS rewrites the rule book, there are investment options and strategies to help cope with the tax burden, such as:

How an adviser can help: While its illegal to evade taxes, its smart to legally minimize your obligations by understanding the rules. Enlist the help of a professional to make sure youre not paying a penny more than you should and to plan how best to access your retirement accounts in the future.

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Economic Security Planning, Inc.

Today's column addresses questions about spousal benefits before delayed retirement credits at 70, potential effects on Social Security benefits of the WEP and the GPO due to receiving a public pension and what happens to other benefits drawn on a person's record when child benefits end. Larry Kotlikoff is a Professor of Economics at Boston University and the founder and president of Economic Security Planning, Inc, which markets Maximize My Social Security and MaxiFi Planner.

See more Ask Larry answers here.

Have Social Security questions of your own youd like answered? Ask Larry about Social Security here.

Will Changes In The Full Retirement Age Reduce My Social Security Benefit At 70?

Hi Larry I turn 68 January 2021 and I was planning on waiting until 70 to start drawing my Social Security retirement benefits. I currently receive my spousal benefit, which is relatively small. My wife retired at 62. Will my age 70 Social Security benefit be reduced due to all these changes of full retirement age I've heard about? Thanks, Jonathan

Hi Jonathan, Your own Social Security retirement benefit amount won't be reduced as a result of the fact that you've been drawing spousal benefits. Nothing has changed with regard to Social Security regulations that would affect your ability to wait and claim your full rate at 70 when you reach that age. Your full retirement age (FRA) is 66, so if you wait until the month you turn 70 to start drawing your retirement benefits, you'll receive four full years of delayed retirement credits (DRCs). That will make your benefit rate 32% higher than if you'd started drawing your retirement benefits at FRA. Best, Larry

Is It True That My Social Security Amount Will Be Reduced If I Receive PERS Retirement?

Hi Larry, I am a retired NV teacher in the marvelous PERS retirement system. I worked enough summer jobs and NV National Guard to qualify for about $900 when I turn 66 years and two months old. The rumor mill out here claims that Ill only get about $300 monthly from Social Security because Im receiving PERS money. Please, tell me the rumor mill is wrong. Thanks, Chuck

Hi Chuck, Your monthly Social Security retirement benefit rate won't be reduced by as much as $600 because of your PERS pension, but it sounds like it will almost certainly be reduced significantly due to the Windfall Elimination Provision (WEP). The WEP can cause a person's Social Security retirement benefit rate to be calculated using a less generous calculation formula if they receive a pension based on their work and earnings that were exempt from Social Security taxes.

I don't have enough information to be able to give you an idea of how much your Social Security rate may be reduced, but you may want to consider using my company's software Maximize My Social Security or MaxiFi Planner to analyze your options so that you can determine the best strategy for maximizing your benefits. Our software is fully capable of handling WEP computations as well as the Government Pension Offset (GPO) that could also come into play if you receive auxiliary or survivor benefits based on another person's Social Security record. Social Security calculators provided by other companies or non-profits may provide proper suggestions if they were built with extreme care. Best, Larry

What Happens When My Son's Benefits End?

Hi Larry, My last son is turning 18 in January and his Social Security benefits will end. What happens to the money and does it come back to me or does it just end? Thanks, Rita

Hi Rita, Your son's benefits will simply stop being paid when he's no longer eligible. Child benefits paid from the record of a living parent are auxiliary benefits. In other words, they are an extra benefit paid in addition to the parent's own retirement benefit rate. Auxiliary benefits are only paid if an eligible family member qualifies for such benefits.

The payment of auxiliary benefits does not reduce the benefit amount payable to the worker whose record the benefits are paid from. Therefore, since your son's benefits had no effect on your benefit rate in the first place, your benefit rate won't change as a result of your son's payments stopping. Best, Larry

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Ask Larry: Will Changes In The Full Retirement Age Reduce My Social Security Benefit At 70? - Forbes