USA Today: Plan on Not Working Past Age 65
Robert Powell recently wrote an article featured in USA Today that reports that one in two Americans who planned on working past age 65 found themselves retiring unexpectedly for various reasons. As a result, Powell suggests that those who do plan on working past age 65 should have a backup plan in place in case the plan to continue working goes awry. Dave is quoted throughout the article as Powell outlines eight steps that one can take now to ensure your finances, insurance, taxes, estate, and investments are all covered past age 65.
Some of the steps one can take now include:
- Planning for All Possible Outcomes
- Setting Aside Cash
- Buying Enough Insurance
- Planning on Saving Even More
- Keeping your Skills Current
- Planning your Estate
- Framing your Future Differently
- Getting Professional Help
Here’s what Dave had to say about setting aside adequate cash reserves:
At a minimum, you should set aside three months of living expenses, but consider setting aside even more to cover out-of-pocket expenses from losses that are not insured, are insured but subject to a deductible or for which reimbursement may be delayed, says Dave Yeske, managing director of Yeske Buie in San Francisco.
“Building up a decent reserve, six to nine months or even more, can give one so much more flexibility, whether to job hunt, retool skills or both,” says Yeske. Consider increasing your reserves if your job is insecure or involves highly variable income.
When asked “How much insurance should you buy?” Dave says:
Given that most people leave the workforce because of health problems or disability, you should check your current employment benefit package. “If there are options for increasing disability benefits, do it,” says Yeske.
And if you don’t have disability insurance through work, buy some. Yes, individual disability insurance policies can seem expensive and may create budget issues, but you might be able to purchase a policy through your professional association or trade group, says Yeske.
How much should you buy? “Our policy is to tell clients to buy as much disability insurance as the company will issue because it will never give you enough,” says Yeske.
One “trick” to consider, says Yeske, is to make sure that your premiums are being paid with after-tax dollars because this makes the benefits, if and when received, tax-free, effectively increasing your benefit.
Dave also gave his thoughts on the importance of keeping your skills current:
Even in your 50s, your human capital — your current and future earnings — is often your biggest asset, both in terms of how every additional year of work is an additional opportunity to save and also another year that you don’t have to dip into existing savings, says Yeske. So, make sure you have the skills, knowledge and experience to stay employed or get re-employed. Yeske recommends attending a community college as your first line of defense.