Some retirement communities are so austere, the adult children get jealous. Of course, when they fantasize about retirement, the cost is not a number they care to imagine.

When it comes to retirement, you need to understand how your finances will be in the future (not just today). One of our care advisor’s mother used to live in the Silicon Valley and her deed to the house was a little over $35,000. Today, the going rate for a home in the Silicon Valley is over $1 million, so be as wary as you are thankful. Here are 4 tips for senior financial planning.

1. Don’t Depend on Social Security

After working for half a century, it’s easy for us to forget (i.e. pretend) how much that adds up. Let’s face it, it’s a small portion of your paycheck… and it doesn’t get much larger. Social Security cannot be the backbone of your finances. It will help, but it’s not enough if you imagine yourself living on a beach, and it’s certainly not enough if you want need long-term care. The latter brings us to tip 2.

2. Plan on Long-Term Care Costs

Even if you’re perfectly healthy, lives can change in a heartbeat. It’s better to have funds in reserve should the need arise, than have the need arise and be strapped for cash. No one wants to leave their home or be reliant on others for their wellbeing, but factor it in as a possibility so you’re not blindsided should the worst happen. Speaking of long-term care costs…

3. Medicare does not Cover Long-Term Care

Medicare is useful for a great many things, but long-term care isn’t one of them. However, Medicaid does cover some long-term care costs, but only after numerous stipulations have been met, i.e. you’ve exhausted your funds trying to pay for care.

4. Inflation, Inflation, Inflation

As mentioned earlier in the article, assume your money isn’t going to be worth the same. Every year inflation goes up by approximately 2.5%. This is why a lot of people get involved in real estate if they can afford it. Real estate may suffer a bit, but property is always sought after. Many people invest in property so as to not have all their money tied up in one place.

Again, the Silicon Valley is just one example of a place where investments in property there paid off. Similarly, being based in the Pacific Northwest, Seattle is growing into another technological hub. If you can afford property, it’s a good path to take.

When it comes to financial planning, you want to be prepared. Since the end of school and the beginning of your career, you basically work until you can afford the endless summer vacation you always dreamt of. Do not let poor planning ruin that dream.