Even with detailed planning for investments and savings, spending the savings and running out of it after retirement is something you need to avoid. There are some factors you need to constantly keep a check on. Firstly, your balance sheet shows that you are keeping a reasonable amount of money in term deposits and banks. Even after retirement you need to remain in touch with different institutions to analyze which institution is offering more rate and less charges. Also remain cautious of small institutions that can lure you into fraudulent investments.
After retirement it is always good to keep yourself functional for both monetary and health related reasons. After you retire at 60, you and your wife can take some time off; take a vacation and then plan for some part time job. You both are doctors and after retirement you can work part time in field of education as lecturers for medical students or as consultants; workings two to three days a week. This will let your savings remain intact and you can enjoy retired life without worrying about running out of money.
However, you need to manage your income below the maximum level of income that Social security administration allows in order to take full advantage of social security benefits. In case your part time income level is above the level where social security administration charges amount for each dollar income, you should consider availing the social security option after you leave the part time job. You can also put some of your part time job income into the retirement plans that your company is offering so that you can take advantage of tax free income.
You currently own two houses one of which you use in weekdays to go to hospital. After retirement you might consider living in the city house where your relatives also live nearby and give the apartment near work on rent since you do not need to go to hospital on daily basis. The current rates for rent vary from RMB 4000 to RMB 6000 in normal and vacation days. This will generate an extra income for your retired years. Insurance suggestions There are three main insurances that you would want to consider in your golden years; Life insurance, Health insurance and disability and property/ casualty insurance.
You already have a life insurance for which you are paying RMB 17000 semi annually and a car insurance for RMB 2000. After your retirement you need to evaluate the need for life insurance once again. The amount of RMB 17000 paid might not seem very profitable after retirement as your savings will start to deplete after some time if huge chunks of cash are taken out constantly. You can terminate the insurance and get money for that. You can put that money in one of your saving schemes to increase the inflows. At this moment you should consider more insurance schemes apart from life insurance.
The choices you have are simplified employee pension plans, Tax sheltered annuity plans, individually purchased annuities and deferred profit-sharing plans. You should keep your car insurance to avoid huge losses incase of an accident. The new insurance schemes like cancer insurance, mortgage life insurance and flight insurance are not suited for your family needs so you can avoid getting such services. However, property insurance is necessary considering uncertainty of theft, natural disasters and accidents like fire, explosions.
Since you and your wife have only one child, you should have long term care insurance. You should start looking for the most cost effective and benefit yielding scheme now to ensure you are properly taken care of in your old-age. This is especially applicable in case one of the spouse’s disability or death. Property Protection Property protection is important especially in your old age. Apart from the property insurance that we have already recommended there is a need for property management through legal channels in case you or your spouse have weaken power to handle property issues in old age.
If the power of attorney or will is not properly made there might be legal or outsider interferences that can cost a lot to your family. You should make a proper will clearly stating power of attorney distribution between you and your wife or your son under different circumstances. For instance, in case of severe illness, you might want to temporarily shift power of attorney to the spouse or son. There are various home protection plans that ensures that home will not be subject to probate after death. This will give your family an advantage of not going through claims and legal procedures to claim the property.
Since your house mortgage left is for 20 months only and amount for RMB 36000 that is easily affordable now for you and your wife jointly, you do not need a Mortgage Payment Protection plan. Personal Protection Plan There are various personal protection plans provided by companies. Since you and your wife have a certain living standard that in case of one’s death will be lowered to an extent, various personal protection plans give death benefit that gives benefit of loan coverage and amounts to your family for their living.
Since you already have a life insurance, you do not need death benefit. However, you may want to get critical illness benefit and income replacement benefit that can cover your income on monthly basis in case of severe illness till you get healthy. This can cover for your part time job after retirement. The long term care insurance suggested earlier is also one of the ways to ensure your personal protection.