Money Matters – Boomers Turn 65: Happy Birthday
BOSTON (CBS) – The oldest boomers born in 1946 are turning 65 this year. They may be eligible for Medicare and to retire from their jobs and collect a full pension but they still must wait until they turn 66 to collect their full Social Security benefit.
According to a government analysis taken from the new census data, one in six older Americans lives below the federal poverty line, which almost doubles the number of very poor seniors compared to the rest of the population.
A Harris poll released in February found that 25% of people ages 46 to 64 say they have no retirement savings. And of those over age 65, 22% have no retirement savings.
Another survey found that 20% of Americans are banking on Social Security to be their main source of retirement income. That is not going to be enough income to maintain your current life style.
So if you are approaching 65 and have not saved very much what are you supposed to do? Simply put, you probably cannot retire unless you want to live with one of your kids.
If you have a job, keep it. And next year when you turn 66 and can collect your full Social security benefit, consider one of two scenarios. Keep working and accrue a larger Social Security benefit or begin to collect while still working and save your Social Security benefit. That will give you some savings set aside for emergencies.
If you don’t have a job, consider finding one. I know this is supposed to be your retirement and the time in your life where you kick back and enjoy life, but without some savings it will not be the golden years but more like the golden arches for meals.
Work on your budget. List all of your expenses. That gives you the dollars it takes to keep you solvent.
What is your income going to be in retirement? Social Security and possibly a pension. What have you got in savings? Experts say you should only use about 4% of savings annually if you want it to last.
So let’s say you have $100,000 saved. Which is a lot and if you take only the 4% that’s $4000 the first year and less each year thereafter unless it earns more than 4%. Will the $4000 be enough to supplement your income and help maintain your life style? Or do you have to withdraw more or do you have to consider changing your life style and living on less?