Читать книгу Social Security For Dummies - Peterson Jonathan, Jonathan Peterson - Страница 62

Half the people in any given age group will exceed their life expectancy, in some cases by a lot. Does longevity run in your family? For older couples in decent health, the odds that at least one spouse will survive to a ripe old age are very high. Life expectancy may be higher if you have a good education, if you make a nice living, if you’re closely connected to your friends and family, and if you’re careful about keeping in shape.

The possibility of living a very long life can be a big factor when you’re deciding when to start Social Security. You could live a lot longer than you expect. That means your price tag for retirement will keep going up, while financial resources may dwindle. How much will the cost of living be 20 or more years down the road? What about doctors’ bills or long-term care needs? How long can you realistically expect your savings to last? The bigger Social Security payment you get by delaying benefits until you’re 70 could come in very handy in those later years.

Here’s some food for thought: A man who turned 65 in 2015 can expect to live about another 17.9 years. A woman who turned 65 in 2015 can anticipate another 20.5 years. At age 75, he can expect another 11.2 years, and she can expect another 13. If that man and woman make it to 85, each is projected to live past their 90th birthday. Among today’s 65-year-olds, one in three will make it past 90. Almost one in ten will reach 95.

Knowing your life expectancy isn’t enough. You also need to know what gives you peace of mind when it comes to money. What do you think is worse: living longer than you expected and running short of money, or living shorter than you expected and feeling secure until the end (even if you didn’t max out your lifetime Social Security benefits)?

To illustrate, I present Eager Edgar and Steady Betty, two pre-retirees who are thinking about the next phase of their lives in very different ways. Both are 61 and have had virtually identical earnings in their careers.

 Eager Edgar dreams of retiring from his job as a warehouse manager and trekking through the wilderness while he still has the energy. His parents died young, and he views early retirement as his last sure chance to really live. He has a couple hundred thousand dollars in an individual retirement account (IRA), and his rent is modest. The month after he turns 62, Edgar collects his first Social Security payment of $1,600.

 Steady Betty sees the world differently. She likes her accounting job, even though the commute is increasingly stressful. But Betty doesn’t want to worry about money when she’s older, and she knows her mother lived until 90. Betty decides to wait until she reaches 66 (her full retirement age) before claiming Social Security. The prospect of getting a bigger monthly payment and building her nest egg further gives Betty peace of mind.

 Fast-forward a few years. Eager Edgar’s arthritis is getting worse, and his medications are costing more and more. After a couple of adventures in the Rocky Mountains, his hiking equipment begins to gather dust. Unplanned costs for healthcare, a loan to his unemployed son, and the rising cost of living reduce Edgar’s savings. A long stint in a nursing home costs him $30,000. For the last three years of his life, Edgar is obsessed with the fear that his savings will run out and he’ll lose his independence, all because he has to survive on the reduced Social Security benefits he chose. He takes to splitting pills in half, which increases his pain. He dies at 84, a lot later than he expected.

 Steady Betty sticks to her plan, putting away savings every month. At 66 she begins collecting her full retirement benefit of $2,133 and enjoys a fulfilling new chapter. A fatal aneurysm brings her life to an abrupt end, midway through her 74th year, much earlier than she expected.