By Deka Wiebusch
For The Bellingham Business Journal
The new retirement age is 70. I know, what? You’ve likely heard that 40 is the new 30 or 50 is the new 40. Unfortunately for those who are looking forward to retirement, 70 is the new 65. Eating healthier, being more active and medical advancements have led to living longer and this has had a backward effect on retirement. Due to this, many financial professionals, including Suze Orman, are coming out and saying 70 is the new retirement age.
Their advice is to delay retirement in some form until you are 70. One way to postpone drawing on retirement funds would be to delay taking social security until you are full retirement age, but hopefully delaying until 70. Another suggestion is working part time to earn enough income to cover your yearly expenses, therefore delaying taking withdrawals from any other retirement accounts.
The biggest reason for a later retirement date is mostly attributed to Americans rising longevity.
Today the average American is drawing social security at the earliest possible age, 62. However full retirement age is now 67 for those born in 1960 or later. Drawing social security early can drastically reduce your benefits.
Yet the Social Security life expectancy estimates shows that the average American who hits age 62 will live until approximately age 82 to 84. That is 20 years of retirement income needs. But what if you live longer than expected? Your retirement savings may need to last you 30 years or more.
Additionally, the rising cost of healthcare is also putting more pressure on the amount of retirement funds needed. Many Americans are relying on Medicare starting at age 65 but Medicare can still be costly. And to top it off, those collecting social security often find their cost of living increase fully spent by the rising cost of Medicare.
What do you need to do about this news?
The answers are still the same — save more, more often and probably for longer than you expected. The good news is that if you want to retire early you have the power to make it happen by what you do today. We recommend seeking professional financial advice to get you on track for retirement at the age that is right for you.
Deka Wiebusch CRPC® AIF® is a financial advisor at Skyline Advisors, a locally owned and operated Registered Investment Advisor providing money management and financial planning services. Skyline Advisors is located at 405 32nd St., Ste 201 in Bellingham and at www.myskylineadvisor.com. Wiebusch can be reached at (360) 671–1621 or at firstname.lastname@example.org This article is solely for informational purposes.