You’ve been with the company your whole career and you’ve got a gold watch and a pension if you’re lucky. But with longer lifespans and more active seniors, today’s retirement landscape is vastly different.
Retirement requires a modern approach to financial and personal planning so retirees can make the most of this new period in their lives. Baby boomers represent the largest segment of the current wave of retirees, and many people may be searching for something meaningful for their next chapter.
Today’s retirement may include periods of work or full-time volunteering, going back to school or even starting a small business. In fact, the fastest growing age group for both Peace Corp volunteers and new business owners is 50 years and older.1,2
No matter what your retirement looks like, you’ll need to set the right goals and plan carefully for success.
Waiting to retire
Accounting for greater life expectancy and increased healthcare costs are two of today’s biggest retirement challenges. The average retiree may need finances to last two or three decades, which requires a higher level of savings.
One of the most effective ways to boost financial security is simply delaying retirement for a few years. By working through your 60s, you should be past the expense of raising children or paying off mortgages, which makes it a great time to accumulate savings.
In addition, waiting to claim Social Security benefits can yield considerable gains. Waiting until age 70, instead of claiming at the earliest possible age of 62, can yield a 76-percent increase in Social Security payouts.3
Stability when you’re single
Traditionally, married couples would plan for retirement together and could expect to share their financial security during retirement. However, the divorce rate for adults over age 65 has doubled among men and tripled among women since 1980.4
Growing divorce rates are contributing to the number of 30 million single Americans over age 55. As a result, each person needs to take control of their own plan and develop a financial roadmap for retiring as part of a couple, and for being an individual retiree, just in case.
Heading back to school
Paying for children’s education has always been a big part of financial planning. But these days, many older adults may be thinking about their own tuition.
More retirees are going back to school to pursue secondary degrees. But even though tuition rates are at an all-time high, retirees can still make education planning work for them.
Many colleges offer discounted—even free—tuition for students over age 60. For example, people over age 60 can attend California’s 23 state universities for free, regardless of income level.5 Retirees can also enjoy other campus activities, such as guest speakers, sporting events and concerts. In fact, many campuses are building retirement facilities or partnering with existing facilities to attract more retirees.6
Although retirement has changed dramatically over the last 30 years, some aspects have remained consistent: planning, saving and setting goals are still at the heart of any successful retirement.
Just like your 401K, IRA, or annuities, home equity is a powerful financial tool that can greatly enhance your retirement funding plan. Contact a FAR representative today to learn more about the benefits of reverse mortgages and how they may help you secure long-term financial freedom.
1Encore Entrepreneurs. U.S. Small Business Administration. https://www.sba.gov/content/50-entrepreneurs
2Volunteering at Age 50+. Jan. 15, 2009. Peace Corps. http://files.peacecorps.gov/multimedia/pdf/learn/whovol/Volunteering_50%2B.pdf
3Retirement Planner: Delayed Retirement Credits. Social Security Administration. https://www.socialsecurity.gov/planners/retire/delayret.html
4Susan L. Brown and I-Fen Lin. The Gray Divorce Revolution: Rising divorce among middle-aged and older adults, 1990-2010. National Center for Family & Marriage Research. Working Paper Series. March, 2013. Bowling Green State University, Ohio. https://www.bgsu.edu/content/dam/BGSU/college-of-arts-and-sciences/NCFMR/documents/Lin/The-Gray-Divorce.pdf
5The Over 60 Program. California State University. http://www20.csueastbay.edu/prospective/cost-and-financial-aid/discount-programs/60-and-over-program.html
6Don Dahler. Back to School: College towns woo retirees. May 22, 2015. CBS News. http://www.cbsnews.com/news/back-to-school-college-towns-woo-retirees/