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How will you pay bills at 100?

By Jennie L. Phipps ·
Monday, January 10, 2011
Posted: 4 pm ET

I wrote yesterday about 107-year-old Leonard McCracken, who has had a rigorous savings and investment plan before and throughout retirement. But most of the rest of us haven't been as smart.

A recent survey by the Society of Actuaries on retirement planning and living to 100 concluded:

  • Forty-eight percent of Americans aged 45-70 have no financial plans in place should they live longer than they expected.
  • More 33 percent of Americans aged 45-70 are worried about running out of money during retirement, but only 20 percent plan to purchase an annuity or other form of guaranteed lifetime income to protect their assets.
  • Nearly 71 percent of respondents said they plan to claim Social Security before the age of  70, despite the society's recommendation that people claim Social Security as late in life as possible to help secure more guaranteed lifetime income in retirement and help hedge against the risk of outliving assets.

The same people who don't hesitate to buy fire insurance are ignoring the potential for outliving their money and refusing long-term care insurance and lifetime annuities -- even though the likelihood that they will live past 85 is far, far greater than the potential that their homes will burn down, says Anna Rappaport, chair of the Society of Actuaries' Committee on Post-Retirement Needs and Risks.

Rappaport isn't recommending that you get rid of your fire insurance. But she thinks that anyone planning for retirement should consider how they will pay the bills under any of these circumstances:

  • If they live to be 100.
  • If their spouse lives to be 100.
  • If their spouse dies and leaves them alone.
  • If they incur large medical bills.
  • If either partner needs long-term care.
  • If they suffer from Alzheimer's or some other cognitive decline.
  • If they can't stay in their home and have to sell it and live somewhere else.
  • If earning an income in retirement is out of the question.
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January 13, 2011 at 9:45 am

Speaking of sync-up, they also need to sync Medicare to the new Social Security age as it goes up. Both these programs contribute to deficit spending, and it's just crazy why these two programs should have different start dates for eligibility.

By the time I retire, the age to collect will have become 70, so why not make it 70 for both Social Security AND Medicare?

Maybe the prospect of this will wake people up as to how much they really need to save, and quit spending at the grocery stores, malls, car dealerships, and real estate agent's!


Robert Sheperd
January 11, 2011 at 8:30 pm

The experts says we ought to start taking Social Security as soon as possible at age 62 because at some point they are going to run out of money. 71% is taking their advice.

The government, by act of Congress, needs to STOP offering us the ability to start taking Social Security at age 62. Secondly, they need to change the start date to sync up with Social Security's start date - like age 67 and adjusting to higher ages over time as the Social Security age adjusts.

People could still get Social Security disability if their doctor agrees that they are disabled and unable to work.