We all want to live forever. Turns out, quite a few of us are. Okay, maybe no one lives forever but it’s a fact that more and more Americans are living to 100 and beyond than ever before. According to the Center for Disease Control and Prevention, the average man or woman presently living in the United States can expect to live to approximately 79 years of age. When you consider that’s an average, you begin to understand that many people will live much longer than that. Says Policygenius.com, while living a long life appears on the surface to be a grand thing, it also has serious financial implications. You might have a real opportunity to live to be 100 or older, but the question is, can you afford it?
Since stretching your retirement savings will be an essential component of living longer, you will need to do some creative planning that might include working longer, saving more in your middle years, or even planning on taking out a reverse mortgage on your primary residence once you turn 62. Michael Branson, CEO of All Reverse Mortgage, states that when your reach your golden years and beyond, the last thing you’ll want to worry about is coming up with mortgage payment for your home every month. But by securing a reverse mortgage loan, borrowers can tap into the massive amount of equity they’ve built up by making their mortgage payments on time for decades. You can borrow this cash tax free, and you can live in your home for as long as you wish. In other words, no payment on the loan is required until the last surviving homeowner dies or decides to sell the primary residence and move out. Not a bad option if you maintain your good health up to and past 100 years old.
But a reverse mortgage is just one of the many opportunities you can research for stretching your retirement budget in order to live comfortably as you approach triple digits. Here are a few more.
Purchase Long-Term Insurance
The harsh irony of living to be 100 means you might not be in the best of health while doing it. Which is why Policygenius.com strongly suggests you invest in a long-term insurance policy early on in your life. It will help cover many of your expenses should you contract a chronic medical condition and/or disability that will necessitate an extensive stay in a long-term medical care facility. It’s said that the average cost for long-term care in America can run around $225 per day. That’s close to $7,000 per month. If you were to rely only on your retirement savings to pay the bill, chances are you would soon be broke. Certified Financial Planner, Brian Sheahen claims that by buying a long-term care insurance policy in your 40s or 50s, you will be stretching your retirement savings significantly. It will also provide you with much needed peace of mind.
Create a Withdrawal Plan and Stick to It
It’s important to determine how much money you will need every month to live comfortably in your old age. After you come up with a realistic number, plan on paying yourself that amount every single month. You need to come up with this number while still in your middle years just in case you find that you need to be making more money prior to becoming a senior. Sheahan stresses that paying yourself a set amount of cash every month rather than taking out a big sum of money all at once, will maximize your retirement savings while maintaining your investment opportunities. It also prevents overspending.
Grab a Part-Time Job or Gig
If you’re in good shape upon retiring from your day job, you might want to seek out a part-time job or gig that will not only bring in extra cash, but that will also help you pay off any extraneous debt you’ve accumulated along the way. In fact, a good rule of thumb is to make sure you are debt free three full years prior to retirement. Getting a part-time job after retirement has other benefits also, like staying relevant in your old age. You can enjoy the company of others while feeling young and useful.
If you’re still living in an expensive, overly taxed state like California or New York upon retirement, you might want to pack up and move to a less expensive locality in Texas or Florida, for example. Even if you love where you live, the cost of living in an expensive state can eat away at your retirement savings. If you don’t have a lot of family around, you should research the benefits of a state that boasts less taxation, plus more affordable food and housing.
Living to be 100 or older is no longer a pipe dream. While the exact figures vary, it’s estimated that there are more than 100,000 persons 100 years old or older presently living in the United States. Back in 2014, that number was said to be about half, which means long life is dramatically on the increase. It’s up to you to prepare for a future where retirement in your early 60s is just the beginning of the next phase of a long life. That life will be expensive, so do your research and find out which savings programs and opportunities are the right ones for you.