How to prepare for a longer retirement than you might think


How long will your retirement last? No one can know, although there are calculators such as the Social Security life-expectancy calculator that can help give you an estimate. But people are living longer than before. After retirement, you may live for another 20 years or more. Are you prepared for a retirement that could last for decades? Here are some things to consider.

The average life expectancy in the U.S. is 78.8 years; 81.2 years for women and 76.4 years for men. But a woman turning age 65 can expect to live on average another 22 years. A man turning 65 can expect to live on average another 19 years. For a couple both turning 65, at least one member is likely to live into their 90s.

A lot of people are not prepared for these extra golden years. Running out of money in retirement is a big concern for many retirees, but there are other considerations as well.

1. Investing too conservatively won’t provide enough growth

Unless you have huge savings amassed, putting all of your savings in “safe” investments like CDs and money market funds is unlikely to provide enough growth to last through retirement. Particularly with today’s low interest rates, many of these accounts don’t even keep up with inflation. Based on recent research, many financial advisors now recommend putting a substantial portion of your savings in stocks, especially later in retirement, in order to provide sufficient growth. Research suggests an optimum approach is to invest more conservatively at the start of retirement, and gradually ramp up exposure to stocks as retirement goes on.

2. Healthcare is expensive and getting more so

The Employee Benefits Research Institute estimates a 65-year-old couple will need $158,000 to have a 50% chance of meeting healthcare expenses in retirement, and $271,000 to have a 90% chance. This is for a couple with median healthcare costs and includes prescriptions. If you have advanced healthcare needs, over-the-counter medications, or dental care, the costs will be higher. The AARP healthcare costs calculator can give you some ideas of your healthcare costs and how to minimize them.

Once you’re eligible for Medicare, you have a choice between traditional fee-for-service or Medicare Advantage, which is a managed-care alternative that offers comprehensive coverage for inpatient and outpatient services and prescription drugs, and possibly vision, hearing, and dental care.

Medicare Advantage can save you money, but you’re limited to using healthcare providers in the plan’s provider network. You also have to ensure the plan covers prescription drugs you need without additional cost. With traditional fee-for-service Medicare, you can use any healthcare provider that accepts Medicare, but will probably need to enroll in a prescription drug plan and purchase a Medigap supplemental plan to cover out-of-pocket costs.

3. You’ll probably want to revise your living arrangements

As people grow older, they typically want or need to revise their housing. Your residence will need to accommodate the possibility that you or your spouse will be physically handicapped later in life. You may not want to climb stairs every day. You may need wider doorframes and kitchen spaces to accommodate a wheelchair, low-entry showers, and a relatively short driving distance to a hospital or medical center.

People make different choices to plan their retirement lifestyles. Many downsize to smaller homes now that the kids are grown; some move to lower cost areas or states; others move to senior communities with more social contact and less maintenance. An increasing number are choosing to stay in their homes and make renovations to accommodate their retirement lifestyle. The options are many.

Whatever living arrangements you decide on, you’ll want to plan ahead and make the appropriate arrangements in advance – it doesn’t get any easier as you get older. If you plan to stay in your home, you might consider making any major renovations before you retire, while you’re still receiving a paycheck.

4. Many retirees require long-term care

The likelihood of developing Alzheimer’s doubles every five years starting at age 65. By age 85, the risk of developing Alzheimer’s each year is nearly 20 percent, according to a study reported in the Annals of Neurology.

Long-term care is more important than many people realize. Even if you are relatively healthy and active now, you will want to provide for the possibility that you or your spouse will require assisted living at some point. Seventy percent of people over 65 will eventually need some form of long-term care. At least 6.4 million people age 65 or older today will need long-term care within one or two years after turning 85. For married couples, the chance that one spouse will need long-term care rises to 91%.

5. Social isolation is a big problem among retirees

Many people get the majority of social contacts at work and through their children’s activities. After retiring and the kids moving out of the house, all that is gone. Over the course of years, this lack of social interaction can have devastating effects on mental and physical well-being. Retirees who age in place by staying in their homes are particularly vulnerable. Twenty-eight percent of Americans over the age of 65 live alone. Studies find that seniors who feel isolated and lonely are more likely to report poor physical and mental health, and suffer cognitive decline. Without regular social interaction, there’s no one to notice when a senior is having health, financial, or other issues, and offer help or advice.

In order to avoid these negative consequences, you will need to actively seek out ways to cultivate and maintain interactions and relationships. There are many things you can do:

  • Volunteer. Your local area may have many volunteer opportunities. Hospitals, libraries, charities, churches, museums, and social service organizations are among those commonly in need of volunteers.
  • Find a social hobby. Whether playing cards, scrapbooking, painting, fishing, or restoring old cars, hobbies enable you to get together regularly with others.
  • Exercise. An exercise group is a good way to meet other people and stay physically active at the same time.
  • Schedule family time. Call and visit your family regularly to touch base, laugh and share stories.
  • Maintain contact with old friends from work or others in your life just to take a walk, have lunch, or chat on the phone.
  • Attend church. Getting involved at church will get you out of the house and may create more chances for volunteering and hobbies.



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