Part of my work includes working on a teamthat provides personal finance professional development opportunities for financial educators and counselors, especially those employed by military installations around the world. On June 6-8, 2017, the team provided a three-day series of webinars about retirement planning. The webinars are availablefor free viewing at any time, along with downloadable copies of the webinar slides.
The first webinar, by Kimberly Blanton from the Center for Retirement Research at Boston College, focused on statistics and figures about retirement planning. The overall message was twofold: 1. Increasing numbers of American workers are at risk for falling short of the amount that they need to maintain their lifestyle in retirement and 2. There are effective action steps that people can take to better their financial security in later life.
Some specific actions mentioned by Ms. Blanton were working longer and using home equity as a retirement income resource by trading down to a smaller home with lower expenses (downsizing) and/or using a reverse mortgage. She also mentioned the concept of a work years to retirement years ratio (the higher, the better):
1:1 if you work 30 years and have a 30 year retirement
2:1 if you work 40 years and have a 20 year retirement
3:1 if you work 45 years and have a 15 year retirement
A key take-away for me was that women gain more than men, on average, by claiming Social Security at age 70 versus age 62. This is partly because women are more likely than men to have gaps in their earning history due to child-rearing and care of aged parents. Working longer replaces “0” and low earning years with higher numbers.