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The Savage Truth on Money, 2nd Edition by Terry Savage

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CHAPTER 13

THE SAVAGE TRUTH ON GETTING TO—AND THROUGH—RETIREMENT

Time Is on Your Side

The time to start thinking about retirement planning is well before retirement, when you have time on your side and the flexibility to adjust your investments, your lifestyle, and your expectations to meet the reality of living longer. As the 79 million members of the baby boom generation start turning 65, there will be a new definition of retirement—one that is likely to include the need for continuing employment, even on a part-time or entrepreneurial basis.

That makes sense. Today’s retirees will live much longer than their parents and grandparents, who could sensibly retire at age 65 and expect to live for only a few years. Now, at least one member of a 65-year-old couple can expect to live for another 23 years, to age 88, according to 2010 Social Security data. And there is a 30 percent chance that one of them will reach at least age 92.

The reality of longer lives has a huge impact on retirement planning. On the plus side, it gives us more years to work and save up for retirement. And with new hips and knees, not to mention other medical advances, many seniors are capable of and challenged by the idea of continuing to work. Thirty years on a golf course or at the beach could get very boring!

On the minus side, that longevity not only stretches out your need for income, but exposes you to the potential ravages of inflation or stock market volatility. If you retired at age 65, and had only ...

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