Report: How to afford to live into your 100s

WASHINGTON — There’s no easy way to know how long you’ll live, but there are ways to make sure you have the funding you need well into retirement, says Consumer Reports.

For those aiming to reach triple-digit years — a reality as life-expectancy rates increase — Consumer Reports offers some tips to make sure your retirement savings extend that long, too.

Put off claiming Social Security

Delaying your claim shortens the payment period of your benefit, so you can get more each month. Taking Social Security early stretches payments over a longer period of time and reduces your monthly benefit.

Consumer Reports notes this is a good option if you’re healthy and advises waiting to claim until full retirement age, which ranges from 66 to 67.

 

Buy a simple annuity

Annuities promise pension-like, lifetime income and Consumer Reports says two types of simple annuity products are good investments.

First is the fixed immediate annuity where a lump sum premium in paid to get guaranteed, monthly income right away.

Second, with a deferred-income annuity, you pay up front or spread premiums over several years. Payments begin from two years to as long as 40 years later, the magazine says.

 

Consider long-term-care insurance

With nursing home care in a semiprivate room costing $80,300 a year on average, according to Genworth Financial, buying a policy based on a monthly benefit can pay off.

While Medicaid funds some home care, long-term-care insurance can help fund any gaps.

The National Association of Insurance Commissioners recommends paying no more than 7 percent of annual income in premiums, Consumer Reports says. You’ll pay less if you initiate coverage before age 60, and you’ll pay 6 to 8 percent more each year that you wait after that.

 

Pay attention to your withdrawals

Saving more in your last years of work will help build up your nest egg. Also, living on less can help train you for savings in retirement.

Consumer Reports recommends working with financial advisers to help determine a realistic retirement budget and savings withdrawal rate. It should usually be no more than 4 percent of assets.

 

Know your options with Medicaid

If long-term care could be in your future, it’s best to know what to expect with Medicaid.

States’ rules vary, but Consumer Reports reminds users that enrollees must be at poverty level — for individuals, around $2,000 in “countable” assets; for couples, $3,000 — for at least five years.

The magazine says meeting with an elder law attorney can help you get your assets in order.

More information the topic appears in Consumer Reports’ August 2015 issue.

Copyright © 2019 The Associated Press. All rights reserved. This material may not be published, broadcast, written or redistributed.

More from WTOP

Log in to your WTOP account for notifications and alerts customized for you.

Sign up