The conventional concept of retirement has long been a transition to an “end of life” period. As an example, when Social Security was created in 1935, the official retirement age was 65 and average life expectancy for men in the U.S. was 58. Fast forward to 1960 and life expectancy jumped to 70. Today, according to the Social Security Administration, a healthy 65 year old male is expected to reach age 84 and a woman at that age should live to 87 on average. What this means is that retirement is much more of a new beginning than an ending. Retirees these days are not only embracing travel and leisure, many are going back to school or starting new careers.
Paying the Bill
If you are staying in the workforce, past normal retirement age, paying for everything should be easier. But, if you are planning not to work while traveling and pursuing a more leisurely lifestyle, covering expenses can be challenging. As long as you have saved enough to cover what Social Security doesn’t you should be fine. But, there is always the unexpected that can negatively impact your financial security.
The Plan’s the Thing
Many of us entered the work force full time in our early 20’s. If we you were smart back then you started saving. Many times that doesn’t become a real priority until our 30’s when marriage and kids force the issue. Even if you were diligent and saved back then, you were likely planning on covering a 10 year retirement. Now with living into your 90’s a real possibility, many haven’t saved enough. That combined with the rising cost of healthcare associated with advanced age can make not running out of money a challenge for many. That being said, a good retirement plan can go a long way in helping you reach your goals. There are strategies these days that can help you offset the cost of things like long term care and rising inflation while developing your own pension-like income stream. It’s never too late to plan.
Sources: The Atlantic