Remember when the Beatles came out with their song, “When I’m 64” in 1967? The idea of actually being 64 did not even occur to me then. Now fast forward to today and in two months, I’ll be 64.
For most of us Baby Boomers, this time of our lives was not something that we thought much about and many have not planned for. So what will this time be like for us now that the kids are grown or close to it?
So the first thing I did was to take a look at the amount of social security both my wife (and business partner) and I qualify for. Anyone with an internet connection can go to the Social Security Administration’s website at www.SSA.gov and use the benefits estimator to find out what your amount of monthly social security benefits will be.
It is important to choose wisely when to start taking social security. It can start at 62 years old, but you only get about 75% of the full retirement benefit. For me, full retirement is at age 66. So if I start taking my monthly benefit then, I could receive 25% more monthly benefit than if I start at age 62.
If I want to get even more money monthly, delaying benefits to age 70 (64 is hard enough to imagine, now I’m looking forward to 70????) my monthly check will get another 34% boost.
OK, so all my wife and I have to do is keep working, stay healthy and of course stay alive longer. Sounds great, but not everyone will be able to stay fully employed nor may they want
Staying healthy is partly in our control, but there is also an element of luck and DNA. Bad health can happen and if it does, that may mean leaving the workforce sooner than expected.
There is another factor for many boomers and that is aging parents. Both my wife and I were the caregivers for our respective parents. The reality is that it can be like having a 2nd job. In fact, some boomers need to leave their current jobs to take care of an elderly and ill parent.
On the other hand, the adult kids sometimes need to move back home to help economize while starting a career. Or perhaps they lost a job during the recession and the family home is their safety net.
Having both of the above scenarios at the same time is termed the sandwich generation and we are in the middle of that sandwich.
The last part of the equation is retirement savings. If you have saved for retirement and many have not, financial planners had been suggesting taking no more than 4% of savings per
That rule of thumb of 4% is now being challenged. Since people are living longer, savings need to last longer. Some planners now think that 3% should be the maximum annual distribution from savings.
The problem with all of this is that savings can be a moving target. Depending on what the savings are invested in, the values could grow or shrink at any time. If values shrink and it’s time to take a distribution, that could throw off the calculation of savings lasting an entire lifetime.
Long Term Care Insurance can be bought to help cover some of the expenses if ill health strikes. Annuities can be purchased to provide some measure of certainty of monthly income. I think reverse mortgages are worth a look to help provide monthly income, debt relief or additional liquidity for the unplanned things that can happen.
In the end, we all want to live a life free from money worries. It would also be nice to travel and do the things we always wanted to do. If you would like to see how a reverse might help you in retirement check out Reverse Mortgage Information Center .
If you think you want more information, give us a call or use the contact form to get in touch.
In closing with thanks to the Beatles:
Give me your answer, fill in a form
Mine for evermore
Will you still need me, will you still feed me,
When I’m sixty-four?