The average life expectancy in America is currently 78.74 years, and it keeps going up. Everywhere I go I seem to find octogenarians, nonagenarians, and centenarians living life to the fullest. It makes me feel very optimistic about myself and friends and family, but there is always the nagging thought in the back of my head: How much money do we need to save in order to enjoy all of these extra years?
According to Business Insider:
- $1 million saved will earn you $40,000 a year
- In order to earn $100,000 a year, you need to save $2.5 million
- $6.25 million in the bank will earn you $250,000 a year
So all you need is a few million! Unfortunately, most older Americans are not sitting on millions of dollars, and have to look elsewhere to pay for their extended retirements. Many of the people I have spoken to have put all of their faith into the promise of a reverse mortgage. As I have written before, I am not a fan of reverse mortgages — but for some people, the equity in their home is all that they have, and reverse mortgages provide their primary source of income.
There are other ways to maximize the power of your purse in your golden years if your savings fall short:
- Long-term care insurance can ease the financial burden of age-related medical conditions. To lock in lower premiums, try to get a policy while you are still young!
- If you plan on living longer, it is prudent to delay your Social Security benefits until you are 70. Remember: The longer you wait, the bigger the check.
- There is inevitably some downsizing that is a normal part of retirement. Whether it’s moving to a new living arrangement or simply making meals instead of going out, just know that it’s not the end of the world.
Of course having a healthy body is pointless if nothing is going on upstairs, so part of my strategy includes keeping my mind active by traveling, trying new things, and of course spending time with my family.
Breaking old patterns and setting new ones is often easier said than done. For many people, the difference between success and failure is having someone there to be accountable to. That’s where Certified Money Coaches® may play an important role. For more information about getting to your magic retirement number, contact me.