There are three phases of retirement. In the first phase, you retire in your sixties. You are healthy and energetic. You are happy to start this new phase and enjoy yourself. You travel: Hawaii, Disneyland with the grandchildren and lots of golf.
In your seventies, you begin to slow and enter into the second phase of retirement. By this phase, you have paid off your home. You rarely use your credit card. You become sedentary. During this phase, all the money you have saved for retirement is your nest egg. Think about it. In the second phase of retirement, your monthly income most likely exceed your monthly expenses. Thus, the money in your IRA, checking accounts or annuities will not be spent on anything unless your health fails. At the age of seventy or older, failing health always means long-term care costs. Long-term care costs include home care or residential care at an assisted living facility, adult family home or nursing home. If you do not spend your nest egg on care, what is left over will go to your heirs. That’s it. Bleak in a way. Your nest egg will either pay for care or go to kids.
The third phase of retirement is exactly that – home care or residential care. You costs exceed your income. You begin to deplete your nest egg. You fear you will run out of money. In some cases, you very well might run out of money.
BoomX is all about acknowledging this reality and planning for it.