3 Ideas To Afford Retirement Past Your 106th Birthday

by | Aug 13, 2015 | Quick Tips, Retirement

birthday cupcake

The trip: Pittsburgh to Phoenix. The price: $201 one way (how would I afford to get back?). The trip: ….cancelled.

I will be totally honest, $400 might not seem like a lot of money to some, but for me that is an entire months’ grocery budget that I am just not willing to give up! I enjoy eating WAY more than I do flying.

This got me thinking though, if the average American has a life expectancy between 79-81 years then how much will it really cost to retire? Who cares about a $400 flight! Will I be able to keep this kind of grocery budget when I decide to stop working or will I have to work FOREVER?

The reality is 6.1 million people over the age of 65 live in poverty.

Don’t panic just yet.

To make sure you don’t outlive your retirement funds, I have put together a few ideas on how to soar past  your 106th Birthday, financially speaking.

Save More…Even More. Saving for a decade just won’t cut it anymore. We are living longer (high- fives everyone), and that means financially we are going to need more money to live on. Think way bigger bank accounts. We should plan for up to 2 to 3 year decades in retirement to make our money last.  Did your grandparents live a long life? Your parents? If you answered yes to either of these questions and you are in good health, 2 to 3 decades in retirement is possible. Take into consideration the lifestyle you want to maintain when you retire. If you consider a working income of $50,0000 a year comfortable and you live for 20 years past retirement age, we are talking about needing a $1 million cushion. Hopefully by now you have been taking advantage of saving as much as you can in your 401(k)s and IRAs for financial support during retirement but are you  looking into any additional asset opportunities that may help stretch your dollar further? Longevity Insurance? Start exploring all of your options, it’s never too late to save.

Establish Control. It’s time to talk about budget. If you are like me, budgeting simply means relying on online banking, using free checkbook ledgers as scratch paper, and keeping a box filled with receipts “I think” my accountant needs. Hmmm, now that I read this, hopefully your definition of budget differs from mine. Do you actually know how much you spent last year, or last month,…yesterday? You might be shocked by the amount. Take the time to figure out how much you spend monthly and compare it against how much you receive. Do you have any extra cash reserves, social security, dividends, pension income to pay for any shortfall each month? Are you living beyond your means? It would be beneficial to create some type of budget plan (shout out to Dave Ramsey) to hold yourself accountable. By establishing this type of control over your finances you can get yourself back on track.  Ugh, math.

Be Prepared. Once upon a time, I tried creating a five year plan that looked like this: marriage, kids, great hair. Instead it went like this: dumped, got a dog, very unfortunate hair cut.  Looking back, I consider myself lucky that the five year plan I created never happened. Medical, school, and as I like to call them, “I think I need this” expenses, all of a sudden consumed a big chunk of what I had saved. Since we can’t predict the future (yet), you don’t have to let retirement come as a shock. Set aside an emergency fund and plan for major health care expenses. Let’s be real, the idea of falling and breaking something isn’t as farfetched as it used to be. We are getting older and the better prepared we are for these types of unexpected events the better off we will be. Have the extra funds available in case you do fall (no pun intended).

There you have it! A few basic ideas you can master before or even during retirement. As for me and my trip you ask?  I will shop for the best airfare, see if it’s something I can work into my budget, and apologize to my accountant for my ‘box’ filing system. Will I have enough to retire? I’ll just have to wait and see. Until then, I think I will get a jump start on planning my 106th birthday party.

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