Are You Prepared to Live to 86 Years Old? 88? Or Longer?


Chances are you’ll live longer than your parents, and much longer than theirs did. While that sounds like a gift at face value, a longer life expectancy brings with it some special concerns, too.

The Society of Actuaries, which is an actuary professional organization in Illinois, released new research in 2014 that showed a measurable shift toward an increased life expectancy for both men and women. For men and women aged 65, the life expectancy has increased by about 2 years.

Two years might not seem like a major change. Men are now expected to live to about 86.6 years, and women are expected to see their 88th birthday. But two years, even now, requires a significant amount of savings to get by. Years from now, those two years will be even more expensive to finance.

Are you prepared to live longer than you’d expected? Here is some advice that can help.


Consider a Steady Stream of Income

Some people save and pinch pennies for years, and have a nice, healthy savings account at retirement to live on. Combined with Social Security, this can help support your lifestyle as you enjoy the years ahead. But Social Security can only provide so much monthly income, just slightly over $3,000 at the top end in 2014. And your life savings might not last as long as you’d hoped.

David John, for AARP, tells USA Today that a steady stream of income could give you the security that you need. It would be insurance against running out of money just when you need it most. A deferred-income annuity could be the answer. Some annuities give the purchaser a lump sum at retirement. And some retirees prefer it that way. But with the right deferred-income annuity, you would receive a steady monthly income that will not run out during your lifetime.


Think About Working Longer

You can apply for Social Security benefits as early as age 62, according to the Social Security Administration. But that’s with a pretty hefty penalty, taken as a reduction in benefits, as this is considered early retirement. Full retirement age is 66, so there wouldn’t be any penalty at that point. However, there is one other possibility.

Postponing retirement until age 70 means you’d receive delayed retirement credits. So you could receive your full retirement benefits, plus more. Delaying retirement has other benefits, too. The longer you work, the more you’ll be able to save and invest, giving you even more of a cushion.

Whether you want a lump sum to watch over, or you prefer a life stream of income, chances are you’re going to need more than you realized back when you were in your 20s or 30s.

Remember that living longer might mean you’ll need more expensive medical care at some point. While you’re saving and determining how much income you’ll need later, factor in the possibility of long-term care, which Medicare might not cover.

A longer life expectancy could be both a blessing and a curse, but it doesn’t have to be. If you plan well, and far enough in advance, you can look forward to more birthdays without fretting about how you’ll get by.

The NewRetirement Retirement Calculator can help you estimate your own life expectancy and tell you whether or not you are currently on track to being able to afford your own longevity or not.

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