Retirement Revealed

Exploring Heather Schreiber's 5 costly Social Security traps and exploring options of how to handle them. I've seen it time and again throughout my career: the intricacies of navigating Social Security can trip up just about anyone. So when I saw the headline “5 Sneaky Social Security Traps” in Heather Schreiber's newsletter, I knew right away this was going to be something that deserved a closer look on the podcast. Let's dive into these 5 Social Security traps–and these aren't just random quirks—that can lead to unexpected gaps in income, tax surprises, or permanent reductions in your benefits.  1. The Entire Month Rule You might think that turning 62 means you're automatically eligible for Social Security that month. Not quite. Social Security has a quirky rule: you have to be 62 for the entire month to receive benefits for that month. If your birthday is on June 15, you don't qualify for June's benefit. Instead, your eligibility starts in July, and your first payment doesn't arrive until August. What's even weirder is that the SSA counts your birthday as the day before you were born. So if you're born on June 2, you're considered 62 starting June 1 and therefore eligible for June benefits (which are paid in July). If you're planning on your Social Security check arriving the month you turn 62, you could be left waiting an extra month or two—potentially throwing off your cash flow. 2. Rest in Peace, Now Return to Sender Just like you must be alive the entire month to earn that month's benefit, if someone passes away mid-month, they don't qualify for that month's Social Security payment—even if it's already been deposited. This can be a shock to surviving spouses or family members when the SSA takes that money back. If a loved one passes away on June 14, and the June payment was already deposited in early July, that money must be returned. It wasn't “earned” under SSA rules. So whether you're filing for your own benefit or helping a family member, remember: Social Security is earned month-by-month—and only if you're alive for the full month. 3. Lump Sum FOMO: When Free Money Isn't Always Free When you file for Social Security after your full retirement age, you have the option to take up to six months' worth of benefits retroactively. That sounds great—who doesn't like a lump sum? But here's the catch: taking that lump sum means your official filing date is backdated. So if you file at age 68.5 and take six months retroactive payments, SSA treats you as if you filed at 68—reducing your benefit by 4%. That “free” $18,000–$20,000 could cost you thousands more over the course of your retirement. Sometimes it's worth it, but many people take the lump sum without realizing the long-term cost. 4. Under-Withholding Today May Lead to Regret Tomorrow Here's a situation I see far too often: retirees who start taking Social Security, forget to set up federal tax withholding, and then get a surprise bill come tax season. Unlike pensions or employer paychecks, Social Security doesn't automatically withhold taxes unless you fill out a separate form (Form W-4V). If you don't do this and your Social Security income is taxable, you could owe hundreds—or thousands—at tax time. Take the time to set up appropriate withholding levels. SSA allows you to choose from 7%, 10%, 12%, or 22%.  5. Medicare IRMAA and the Two-Year Lookback When you hit age 65 and enroll in Medicare, your premiums for Part B (and possibly Part D) can go up significantly if your income from two years ago was high. This IRMAA (Income-Related Monthly Adjustment Amount) surcharge can sneak up on you—especially if you had a one-time event like a Roth conversion, large capital gain, or business sale. If you had a significant drop in income due to retirement, job loss, or other life event, you can appeal your IRMAA using a life-changing event form (SSA-44). I've helped dozens of clients successfully reduce th...

Forensic consultant Paul Sippil explains little-known costs for business owners and plan participants and what you can do about them. When it comes to retirement planning, one of the most overlooked areas is the cost hiding within your 401(k) plan. I sat down with Paul Sippil, a forensic 401(k) consultant, in this week's episode of the Retirement Revealed podcast. For the last 20 years, Paul has been helping employers and plan participants understand the full picture of what a 401(k) really costs–and most importantly, what you can do about it. What we revealed may surprise you: many of the fees you could be paying are seemingly invisible, unspoken, and quietly leaving your retirement savings. Your 401(k) Isn't "Free" One of the most common phrases Paul hears when talking with business owners and plan participants is: “I'm not paying anything.” And technically, they're not—at least not directly. That's because 401(k) fees often don't show up on an invoice. Instead, they're extracted from participant accounts through asset-based fees, commissions, and revenue sharing agreements that most people never even notice. Here's the reality: if you're in a 401(k), especially with a small to mid-sized employer, you could be overpaying. And no one may be telling you. The Bigger the Balance, the Bigger the Fee Many 401(k) service providers charge asset-based fees, meaning the more money you have in the plan, the more you pay—even if the services don't change. That fee structure hits high-balance employees (often business owners or long-time participants) the hardest. For example, if your plan has $3 million in assets and your advisor is receiving 0.75% annually, that's $22,500 per year in compensation—whether or not they're actively helping you. Would you pay that if you received an invoice in the mail? However, when the fee is simply deducted from your account through share class expense ratios or revenue sharing, many people never realize it. Small Plans, Big Problems If you work at or own a small business with under 100 employees, your per-participant fees are likely much higher than those in larger plans. According to the U.S. Department of Labor, large plans (those with over $100 million) can be up to 50% cheaper in relative costs. Smaller plans are often stuck with higher costs and less transparency. How to Spot the Hidden Fees Finding these costs isn't easy, but there are tools: Form 5500: This publicly available tax form (found at www.efast.dol.gov) details plan costs and fund options for plans with over 100 participants. Review Share Classes: Funds come in multiple share classes. Some, like “R2,” may carry hefty embedded commissions. Ask your provider if lower-cost versions like “R6” are available. Watch for “Revenue Sharing”: This outdated and opaque compensation method allows brokers and recordkeepers to collect fees without ever issuing a bill. Why Transparency Matters Paul made an interesting point: if employers were required to write a check for 401(k) services as opposed to having the fees quietly and automatically withdrawn, he believes the plan-holders and business owners would actually negotiate those fees, thus resulting in lowered costs. But the industry thrives on invisibility—making it hard for both employers and employees to question or benchmark what they're paying. That's why we suggest a simple test: If your financial advisor can't clearly explain what they're being paid and what you're getting in return, it's time to ask better questions and evaluate your options. Self-Directed Brokerage Accounts (SDBA) If your current 401(k) doesn't offer the investment options you want, ask your employer about adding a Self-Directed Brokerage Account. This feature allows you to invest in a wider range of funds—including ETFs and commodities—that may not be available in your default menu. Not every provider offers this, but it's worth requesting.

Jeremy Keil explores Barron's 5 strategies to respond to market volatility with your retirement portfolio. Are you feeling nervous about what today's market volatility could mean for your retirement? You're not alone. A recent Barron's article titled “Market Anxiety Is Running High. How to Secure Your Retirement Portfolio” caught my attention—not just for the headline, but because it echoes what I hear from so many of you. Retirement can already feel uncertain, and when the stock market adds another layer of unpredictability, it's natural to start asking: “What should I be doing with my investments?” Let's explore five strategies—based on that Barron's article and my own experience as a retirement-focused financial planner—that you can use to help protect your retirement income from the ups and downs of the market. 1. Be Realistic About Market Returns The last decade has seen significant growth for the stock market. From 2009 to 2024, returns were some of the strongest in history. But expecting this trend to continue indefinitely could lead to disappointment. In fact, projections from Morningstar suggest that U.S. equities could return just 3.4% to 6.7% annually over the next decade. Compare that to the roughly 20% growth we saw in 2023 and 2024, and it's a sobering reality check. Being realistic doesn't mean avoiding stocks altogether—it means adjusting your expectations and preparing for a range of outcomes. 2. Get Your Asset Mix Right (Based on When You Need the Money) While it may be tempting to invest based on how the market is performing at the moment, Barron's suggests that your personal needs with your investment should be high on the list of drivers in your investment strategy. Your short-term money (needed within 1–3 years) could be in short-term, stable investments. Long-term money (needed 10+ years out) could go toward growth-oriented investments like stocks. Too often, I see people keeping everything in the market when they're just a year away from retirement, hoping for “one more good year.” And sometimes it backfires—just like it did in early 2020 when COVID hit, and the market took a steep dive. Plan ahead. By adjusting your retirement investments 3 three years before your retirement date, you could have more of a buffer, just in case you retire earlier than expected. 3. Diversify and Rebalance It's tempting to stick only with what's worked recently—especially U.S. stocks, which have produced strong returns since 2009. But diversification means having exposure to different areas of the market, including international stocks. And while international stocks have lagged in recent years, 2025 has shown a surprising shift: as of early June, international indexes are up nearly 19%—ahead of the S&P 500's 2% gain. You never know when one part of your portfolio will outperform. That's why it's important not just to diversify, but also to rebalance—systematically adjusting your investment strategy to maintain your target allocation. 4. Maintain a “Goldilocks” Level of Cash Cash can earn some decent interest—around 4% as of 2025. That doesn't necessarily mean you should pile all your money into savings, but it does mean you have the option to keep a portion of your retirement funds in cash or high-quality bonds for short-term needs. How much cash is enough? Many financial advisors recommend keeping 1 to 5 years' worth of withdrawals in cash or short-term investments. The right number for you depends on your retirement timeline, expenses, and risk tolerance. 5. Bolster Other Sources of Income One of the most underappreciated strategies for navigating market volatility is increasing your guaranteed income. That could include: Delaying Social Security to maximize your benefit Maximizing your pension payout, if available Exploring annuities to create additional income streams I know the word “annuity” often brings up mixed feelings.

Exploring “The One, Big, Beautiful Bill” and its proposed changes to HSAs.

Author Allison McCune Davis shares her insights on why turning 60 can be a powerful new beginning.

Retirement author Mike Drak shares his story of emerging from the hardships of retirement to finding his own satisfaction.

Exploring how to transition from an achievement-based career to a fulfilling retirement lifestyle with author Elizabeth Zelinka Parsons.

Identify the uniqueness of your retirement situation and the variety of ways to build your retirement in a timely manner.

Jeremy Keil explores Kiplinger magazine's article “11 Ways to Grow Your Wealth” and how to apply these strategies to retirement planning.

Learn how to build a retirement marked by intentional effort instead of fear with author Zac Larson.

Exploring the 4 major factors that need to be considered when deciding whether to buy your vacation home in retirement or continue renting.

How you can avoid the 3 biggest retirement mistakes and set yourself up for a secure and meaningful retirement.

Author Benjamin Brandt explains how retirement planning starts with the practice during your working years in order to prepare for a successful retirement

Insurance expert Mike Smith breaks down how long-term care health insurance options have evolved in 2025 to provide a wider variety of coverage choices in retirement.

Author Derrick Kinney explains how to escape a middle class mindset and become a millionaire.

Author and stand-up comedian Paul Ollinger shares how seeking a reasonably happy retirement makes for a greater sense of satisfaction.

Children's book author and CERTIFIED FINANCIAL PLANNER® Jamie Bosse explains how to teach your grandchildren about money.

Jean Chatzky explores how retirement trends indicate that the middle class is winning at retirement and shares practical tips to prepare for retirement in 2025.

Exploring the unique challenges and needs of first responders in retirement with retirement coach and former police lieutenant Kimberly Stratman. When we need them most, first responders rise to answer the call. But what is waiting for them on the other side of the finish line once their career is over? It's a unique challenge, and one that deserves special attention. I recently had the privilege of speaking with Kimberly Stratman, a retired police lieutenant with over 30 years of experience, about her insights into this crucial transition. Kimberly's perspective, as a former officer, and the daughter, sister, mother, and wife of police officers, is truly invaluable. The Realities of First Responder Life (and How it Impacts Retirement) Kimberly's career with the Dallas Police Department, culminating in 20 years as a lieutenant, gave her a front-row seat to the realities of first responder life. She described the double-edged sword of promotion, how it distanced her from the street patrol work she loved, while simultaneously opening doors to teaching and sharing her knowledge. But beyond the daily grind, Kimberly shed light on the less glamorous aspects of the profession – the paperwork, the emotional toll, and the impact on personal lives. As she aptly put it, "Everything that makes us good to write about and makes for good viewing destroys marriages and careers." The constant stress, lack of sleep, rotating schedules, and exposure to trauma take a heavy toll, often leading to physical and mental health challenges. And, as Kimberly pointed out, "Up until just recently, we were supposed to handle all of that privately. We weren't even allowed to acknowledge that we were having any problems, or they would take your badge from you." The Unique Challenges of First Responder Retirement While anyone can struggle with retirement, first responders face a unique set of challenges. They often retire younger, leaving them with potentially decades of life to navigate. They carry the weight of their experiences, both emotionally and physically. And, as Kimberly emphasized, "First responders tend to drop dead a couple of years after retirement." This stark reality underscores the importance of proactive planning and self-care. The loss of identity is another significant hurdle. Kimberly shared her own experience of turning in her uniform, a surprisingly emotional moment that symbolized the end of an era. "When I turned my uniform in, it took me three times to… get it all together… And then when I took the last stuff in, I actually cried when I was driving away. It was very hard." This powerful anecdote highlights the deep connection between identity and career for first responders. Planning for a Successful Transition: More Than Just Finances Kimberly stressed that while financial planning is essential, it's just one piece of the puzzle. "Our time and our health, I would have to say, is even more important than the money." She emphasized the need for intentionality, both in career and retirement planning. "If you're very intentional about it, if you have a plan for it… it's just like everybody's worried about the money and that's important… But our time and our health… is even more important." She also highlighted the importance of addressing health issues proactively. "Know your numbers, be brutally honest with yourself… if you can't go out and do normal stuff… start addressing that." And, perhaps most importantly, she emphasized the crucial role of relationships. "You have to know if your marriage is strong… Work with your relationship with your children… The first responder hasn't been at any of the events… and so the retiree thinks, when I retire, I'm going to spend all this time with my kids. Well, the kids have moved on." The Importance of Early Planning and Flexibility Kimberly's perspective on retirement planning has evolved over time. She now believes that conversations about retirement should...

Learn how to turn regrets into motivation to build a better retirement with guest Lori Emerick of Aspen Group Consulting.

Learn how to find meaning and purpose in retirement after a life in public service with retired librarian and current retirement coach Susan Hawk Schneider.

Discover the power of viewing retirement as a rebirth instead of an ending with retirement coach Karen Carr.

Unlocking the power of relationships to enrich your retirement and reap the health & wealth benefits of social fitness with Susan Hogan.

Unlocking the power of relationships to enrich your retirement and reap the health & wealth benefits of social fitness with Susan Hogan.

Author and CEO of Childfree Wealth® Dr. Jay Zigmont explains the unique financial planning needs and strategies used in childfree wealth management.

Author and podcaster Dr. Jordan Grumet explores how to create your purpose instead of waiting for it to find you.

Author and estate planning expert Mark Shiller shares how to leave wealth to your kids and prepare them for success

Author and executor advisor David Edey shares how to prepare your estate and your executor to leave a legacy behind instead of a mess.

Learn how to build a fulfilling retirement by utilizing a growth mindset - with Wendy Leggett

Learn how to tap into the soul of wealth to build a life that breeds happiness and purpose in this episode of “Retirement Revealed” featuring Dr. Daniel Crosby.

Discover your purpose outside of your occupation and live your best life yet in retirement.

Take advantage of the power of your time in retirement with these mindset re-directs from retirement coach and author David Buck.

Understanding how the results of the 2024 election could affect your decisions in retirement. It's natural to wonder if political shifts will impact your financial decisions. Many are predicting major changes in legislation and economic strategy due to the results of the 2024 election, and while there is merit in anticipating major changes, I find that there are some general principles of managing your retirement plan that can help you navigate the uncertainties that come with changing winds of politics. With that said, let's dive into some of the most common questions I've been hearing related to finances out of the 2024 election. Why Elections Don't Change Core Investment Principles Each election season, it's easy to get swept up in the latest political shifts. Maybe the stock market reacts positively or negatively, but does that mean you should make knee-jerk changes to your portfolio? Not necessarily. I often say this on my podcast and to my clients: the key to investment success isn't trying to predict market swings based on elections or political figures—it's about aligning your portfolio with your needs and timeframe. Consider this: if you're looking to use your funds in the short term, your investments should reflect that, emphasizing stability over volatility. Long-term needs, on the other hand, can typically tolerate a bit more fluctuation because they have more time to recover from market swings. Elections, presidents, and political shifts come and go, but your personal timeline and financial goals remain constant. The Fed, Interest Rates, and Presidential Influence I often get asked how presidential elections and Federal Reserve decisions might interact and affect the economy. In the latest example, we saw the Fed drop interest rates recently, coinciding with the election. People wonder if this shift is tied to who holds office, but in reality, the Federal Reserve operates independently. Fed Chair Powell, for instance, has firmly asserted the Fed's independence from political influence. The Fed's mission is to focus on economic stability and not to sway with each political wind. What does this mean for you as an investor? It reinforces the idea that you shouldn't base your decisions on political shifts. Whether a president wants to cut taxes or pursue particular economic policies, your portfolio's health is still more dependent on your timeline and objectives. Social Security: Will It Be There for You? Social Security will likely go under the microscope in the next few years, particularly in relation to the taxation of benefits. Recent conversations have raised concerns about potential changes to Social Security taxes, especially with the suggestion that taxes could be lowered or even eliminated on benefits. While lower taxes sound appealing at first, they come with trade-offs. If taxes on Social Security benefits were reduced to zero, for example, that would cut about $50 billion annually from the Social Security trust fund—a significant portion of its funding. If Social Security taxes decrease, it could mean fewer funds for future benefits, impacting the program's sustainability. While no one can predict the future, the key takeaway here is that while tax reductions may have personal appeal, it's essential to think about the policy implications.  Should You Be Doing a Roth Conversion Now? With the election results, many people are wondering if they should speed up their plans to convert to a Roth IRA. Historically low tax rates, thanks to recent policy changes, have made Roth conversions attractive. However, if recent election results signal that the current administration may extend these lower rates, the urgency to convert may diminish. Still, a Roth conversion can provide substantial benefits if it aligns with your tax strategy. For many retirees, spreading out Roth conversions over multiple years can minimize tax impact. But remember—financial planning software and ta...

5 Steps to prepare your savings within 12 months of your retirement.

Learn how to turn your grief into goals in order to make the most of your next chapter in life.

Learn how to master Medicare and get the coverage you need at the best rate available.

Melinda Caughill shares the secrets of Medicare enrollment in 2024, what to avoid and how to pick the right coverage. As Medicare Open Enrollment begins, the importance of understanding Medicare and making the right decisions during the enrollment period cannot be overstated. For this week's episode of “Retirement Revealed” I sat down with Melinda Caughill, co-founder of 65 Incorporated, to discuss her playbook for Medicare in 2024. This open enrollment period is particularly crucial due to significant changes that will affect all Medicare enrollees. Here's what you need to know to navigate these waters wisely. The Complexity of Medicare Choices Medicare decisions are not as straightforward as picking a plan. Many people mistakenly believe it's a simple choice between Medicare Advantage and a Medigap supplement. However, the decision path involves understanding whether to stick with Original Medicare or shift to private, corporate-run Medicare options. Each choice comes with its own set of advantages and challenges. Original Medicare vs. Medicare Advantage Original Medicare: Under this path, the government serves as your healthcare provider, offering substantial coverage with reliable benefits. You add a Medigap policy to cover costs that Medicare doesn't, and a Part D plan for prescription drugs. This provides predictable out-of-pocket costs but comes with monthly premiums. Medicare Advantage: This option, managed by private insurers, often advertises zero-dollar premiums and numerous perks such as dental and vision coverage. However, these plans require adherence to strict networks and prior authorization for services, creating potential hurdles in accessing care when you need it most. Timing Is Everything Understanding the right time to enroll or delay enrollment in Medicare is critical. For many, this means determining the best time based on current employment status or other personal circumstances. Each individual's situation requires a unique approach to avoid penalties and ensure adequate coverage. The Looming Impact of the Inflation Reduction Act The Inflation Reduction Act introduces a $2,000 out-of-pocket maximum for Part D drug costs, which initially sounds like a positive change. However, as part of the cost-shifting measures, private insurers may increase premiums significantly or change what drugs are covered to offset their increased financial burden. This change, effective in 2025, starts impacting decision-making now. It underscores the necessity of reviewing your current drug plans during the upcoming open enrollment. Choosing the Right Path When faced with a decision of which Medicare path to choose, it's critical to think long-term. While Medicare Advantage plans are enticing with their low upfront costs, the rigidity and potential high costs of care down the line need to be carefully considered. Original Medicare generally offers broader access to providers and clearer costs. Avoiding Medicare Pitfalls One of the biggest traps that enrollees fall into is relying on Medicare insurance salespeople without understanding potential conflicts of interest. Sales agents earn commissions based on sales from limited portfolios, which doesn't always align with what's best for you. Seek independent guidance to navigate your options without bias. Tips for 2024 and Beyond Review Annually: Each year, from October 15th to December 7th, use the Medicare open enrollment period to reassess your Part D drug plan options and any Advantage plan changes. Plan Ahead: Stay informed about changes in Medicare that could impact costs, coverage, and your healthcare decisions. Seek Expert Advice: Use services like 65 Incorporated to ensure you're making informed choices, especially if you're approaching Medicare eligibility. Stay Informed on Policy Changes: The ramifications of the Inflation Reduction Act highlight a shifting landscape.

Learn how to supercharge your Social Security benefit and potentially grow your lifetime income by over $100,000.

Debunking 3 Medicare myths and examining the ways you can avoid falling for common Medicare mistakes.

David Blanchett discusses the survey results that reveal a building crisis among near retirees who are unprepared for retirement.

Understanding the options available to civil servants entering retirement under FERS. If you're one of the 2 million people in the federal workforce, this post is designed to help you make the most of your retirement plan by understanding the Federal Employee Retirement System (FERS). As we head toward the end of the fiscal year, it's a great time to revisit how FERS works and how you can maximize your benefits. Breaking Down FERS: The Three Key Components Before we dive into the details, let's recap the basic structure of FERS. There are three main components that federal employees need to pay attention to: Pension: A defined benefit that provides income based on your years of service and salary. Thrift Savings Plan (TSP): A defined contribution plan, similar to a 401(k), where you can contribute pre-tax or post-tax (Roth) dollars. Social Security: Just like most employees, you'll also receive Social Security benefits, so don't forget to factor this into your retirement planning. When thinking about retirement, it's essential to plan not only for when to start your FERS pension but also when to tap into your TSP and file for Social Security. The coordination of these three components can make a big difference in your retirement income. Maximizing Your FERS Benefits Recently, I was asked by Money Geek how federal employees can maximize their retirement benefits. Two key strategies stand out: Maximize Your TSP Contributions: For 2024, you can contribute up to $23,000 to your TSP, with an additional $7,500 if you're over 50 (catch-up contribution). The TSP is one of the most cost-effective retirement savings plans out there due to its low fees, so take full advantage of it! Know Your Full Retirement Age: Surprisingly, many people I talk to aren't sure of their full retirement age (FRA) under FERS. Knowing this is crucial because it affects when you can receive your maximum pension benefit. For instance, retiring before age 62 or with fewer than 20 years of service could significantly reduce your pension payout. There are some important distinctions to be aware of, particularly if you retire before age 62 or with fewer than 20 years of service. For example, retiring at 61 with 19 years of service gives you only 19% of your high-3 salary as a pension. However, waiting one more year to reach age 62 and 20 years of service increases that to 22%—a 15% boost in your pension for life! That extra year could be well worth it. Understanding Your High-3 Average Salary Your pension is based on your high-3 average salary, which is the average of your three highest consecutive years of earnings. While this is often your final three years, it's not always the case. It's important to accurately estimate your high-3 salary when planning your retirement. Additionally, if you've had military service, you can potentially add military service credits to your federal service time. This could increase your pension benefit, so be sure to check your service record to ensure all your years are accounted for. Special Considerations for Specific Roles Certain federal roles, such as law enforcement officers, firefighters, and nuclear materials couriers, are eligible for enhanced pension benefits. For example, they receive 1.7% of their high-3 salary for the first 20 years of service, compared to 1% for most employees. Members of Congress are also eligible for the 1.7% rate, making it important to know which category you fall into. Steps to Take in the Years Leading Up to Retirement As you approach retirement, there are four steps you should focus on to ensure you're on track: Maximize Your TSP Contributions: The more you contribute, the more you'll have for retirement. For those over 50, make sure you're taking advantage of the catch-up contribution. Confirm Your Full Retirement Age: Double-check your FERS records to know exactly when you're eligible for full retirement.

Chet Bennetts explains how the results of a financial literacy survey focused on retirement finances impacts the way they are taught today.

Examining life insurance retirement plans and breaking down Nelson Nash's book “Becoming Your Own Banker” to see how they compare to traditional retirement plans.

Examining the 5 reasons you might want to retire ASAP with Ashley Micciche.

5 ways to prepare your retirement plan for a stock market crash early in retirement

Derek Tharp explains how risk-based guardrails can provide a better retirement spending plan than the 4 percent rule would allow.

Breaking down the 4 steps of the "live to 100" strategy as life expectancy increases and conventional retirement wisdom struggles to keep up. Average life expectancy in the United States rises with each generation, and with that trend comes a lengthening of years lived after average retirement. As age 100 becomes more realistic for many people, how can you make sure your finances are set up in a way that takes care of you through your entire lifetime? This discussion was sparked by our recent podcast episode with Steve Sanduski, where we explored how financial planning needs to adapt as people routinely live healthy lives into their 100s. The Retirement Spending Smile One intriguing concept is the "retirement spending smile." This theory suggests that you tend to spend more at the beginning of retirement, less in the middle, and potentially more again later on due to increased healthcare costs. If you stay healthy until 100, your expenses might not follow the traditional downward trajectory and could spike due to medical needs. The AARP Article and Longevity Shortly after our discussion with Steve, I came across an article in the AARP magazine about making your money last until age 100. It got me thinking: if you live to 100, it's crucial to ensure your money does too. With advancements in healthcare, it's becoming more likely that many of us will reach this milestone. Therefore, it's essential to approach both your expenses and income with this long-term perspective. Managing Your Expenses Let's start with managing your expenses if you anticipate a long life. Knowing your biggest costs in retirement is key. From my research, housing, taxes, and healthcare are typically your top three expenses. Housing: According to the Bureau of Labor Statistics, housing costs can be about 35% of your overall expenses, including utilities and maintenance. However, if we strip out the additional costs, the core expense of shelter itself averages around 20%. Consider paying off your mortgage before retirement or downsizing to reduce these costs. But be cautious with downsizing, as it often leads to additional expenses for new furniture and adjustments to your new home. Taxes: Surprisingly, taxes are often overlooked in retirement cost analyses. On average, they constitute about 7% of your expenses. One way to manage this is by diversifying your tax status across various accounts (traditional, savings, Roth, and brokerage accounts). This strategy gives you flexibility to adapt to changing tax laws over the decades. Healthcare: Healthcare costs increase as you age, making it essential to plan ahead. When you turn 65, deciding between a Medicare supplement plan and a Medicare Advantage plan is crucial. While the supplement plan might be more expensive upfront, it could save you significant out-of-pocket costs in the long run. Additionally, consider long-term care insurance to protect against the high costs of assisted living or nursing care, which can be financially devastating if unplanned. Maximizing Your Income Now, let's talk about your income strategy to make it last until 100. Social Security: When making decisions about Social Security, remember its full title: Social Security Old-Age, Survivors, and Disability Insurance. This program is designed to provide support in old age, for survivors, and in case of disability. Delaying Social Security benefits can maximize your lifetime income. Although filing early gives you more money now, waiting could result in higher monthly benefits later, which is crucial for long-term financial stability. Part-Time Work: Consider working part-time in retirement. For instance, would you prefer working full-time from age 60 to 65, or half-time from 62 to 70? Theoretically, the financial outcomes might be similar, but the extended work period can provide a more stable income stream and help stretch your savings. Annuities:

How would retirement planning change if life expectancy rose to age 100? Exploring how differently each generation approaches retirement saving and spending.

Exploring the rules & options for how to handle the Social Security survivor benefit in the event of remarriage.

5 steps to improve your money talks in marriage to set up a better retirement and financial plan with your spouse.

Learn how to calculate the impact on your pension from changing your start date and evaluate the value of your pension based on your financial situation.