Is The Retirement Age Going Up? by Ryan Himmel

There is, without question, a growing trend of people starting to recognize the need to consider retirement at a later age than previously thought.  The financial planning that was done five to ten years ago no longer makes sense since the economic environment is much different, and the life expectancy rate continues to climb at a rapid pace. 

Today the average 65 year old can expect to live to almost 84, versus a life expectancy of 77.9 in 2007 (CDC Aug ‘09).  In addition, the 65 year old plus population is expected to grow from 40M today to 71M, or 20% of the population in 2030 (US Census Bureau June ‘09).  In essence, this means that many are going to be living much past 84 and financial plans need to take that into account.

With that said, let’s review some ways in which you can better prepare for retirement with the hopes of getting there sooner than later.  It starts with cutting out expenses.

Time to Move (Savings: $10,000+)
Before you even start analyzing your budget, seriously consider moving to a lower cost location.  Moving from a city such as New York to a more affordable location like Fort Lauderdale, Florida can save you tens of thousands now and into the hundreds of thousands in the future.   Here’s an example – if your income was $50,000 a year in New York City and you moved to Fort Lauderdale, your standard of living would NOT change if your income was 47.34% less or $26,330 in Fort Lauderdale.  This is just one example – you can go to bankrate.com to check out another city.

Remove High Maintenance Items (Savings: $1,000+)
Sometimes we don’t realize it, but having an extra car can really be an unnecessary expense.  You would be cutting out the high gas costs of $2.50 to $3.25 per gallon, toll fees, and then yearly maintenance charges.

Get Rid of High Fee Investment Products (Savings: Variable)
Scope your portfolio and look at the fee structure for the investments you made with your retirement savings.  A lot of investment products carry high administrative/management fees that can be avoided by shifting to lower fee Mutual Funds and CDs.

Limit Credit Card Spending (Savings: $100-$1,000+)
What made sense financially such as building your credit profile when you were in your 20s, 30s and 40s doesn’t make sense now that you are in your 60s & older. Credit cards are just for convenience and they come with high interest charges (i.e. 15-20%).

Ryan Himmel is a CPA, registered securities analyst and the founder and CEO of BIDaWIZ.com.  BIDaWIZ is a leading online marketplace where business owners and consumers alike can obtain trusted answers to tough finance and tax questions from licensed business experts. Ryan has been quoted in The Wall Street Journal, Forbes, Fox Business, Crain’s New York, among other notable publications.  Ryan regularly contributes to the community with his finance and tax blog. Contact Ryan at ryan@bidawiz.com or on Twitter @BIDaWIZ.

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