Baby boomers and those coming after are living longer, often meaning that retirement is also becoming a larger chunk of a person’s lifetime. The Centers for Disease Control and Prevention says that the number of people living past age 100 has increased from 50,281 in the year 2000 to 72,197 in 2014, and increase of close to 44 percent.
This is great news, but it means more thorough planning is needed for the retirement years. Someone who retires at age 65 can hope to live an additional 35 years, and hopefully without running out of money.
Here are a few tips to help finance those years without too much pain.
Claim your Social Security benefits later in life. People can begin collecting Social Security at their full retirement age of 66, or 67 for those born after 1960. For every year that someone delays they are entitled to an additional 8 percent in their payments. Waiting unit age 70 to begin collecting can increase the benefits by 32 percent, and those higher payments will last the rest of your life.
Be sure your retirement money is keeping up with inflation. Social Security payments automatically keep pace with inflation, and so do some types of government bonds. You can also keep part of your savings in investments that have a track record of keeping up with price hikes like stocks, commodities and real estate. Be careful though, the last group has no guarantees attached.
Try and arrange to have a pension plan from your employer. Traditionally pension payments last as long as you do, even if you live a long, long time. The downside is often pension plans do not keep up well with inflation. See your options at work, and choose wisely.