Oct. 27, 2017
U.S. personal finance guru Suze Orman says that if you stop working in your 60s, you might need to support yourself for another 30 years. How can you afford to live well into your 90s? One way is by working until age 70.
To some extent, this is a U.S. perspective driven by higher health care costs than we face in Canada. But Ms. Orman is definitely onto something in terms of how longer lifespans are affecting personal finance. If we live longer, working past 65 can make sense from both an emotional and financial point of view. "Every dollar you don't spend in your 60s is a dollar that can keep growing for your 70s and beyond," she says.
She offers three suggestions for, as she puts it, resetting your retirement to age 70:
- Delay tapping retirement benefits until age 70: She refers to Social Security, but you could make the same argument for delaying Canada Pension Plan benefits.
- Lay the foundation to work longer: Talk to your employer before retirement about how you could continue to contribute on what could be a part-time basis.
- Take the long view: Working longer will give you more confidence that you're financially set for retirement.
The average retirement age in Canada is around 63, which compares to 61 a little over a decade ago. Retirement at 70 seems like a leap from where we are now, but it can be a problem-solver if you're worried about whether you've saved enough.