Retirement Planning In Your 70s

A decade ago, I couldn’t spell septuagenarian, and yet now, at 72, I am one. A decade ago, I thought I would retire in my 60s. And yet here I am working in my 70s. The reality is that some of us don’t retire until we are into our 70s or even 80s. Some never plan to retire. With improved healthcare and the advent of jobs that don’t require physical labor, this group of late retirees is growing. According to the most recent data from the Bureau of Labor Statistics, 5.8 percent of the labor force are age 70 and older, which includes the current U.S. President.

The challenge is that so much of the retirement income planning literature deals with people who are retiring in their 60s. It’s almost a given to see an article begin “assuming you retire at age 65.” But the planning steps for retiring in one’s 60s are different from waiting until one’s 70s to retire. For example, retirees often believe the “4 percent rule,” limits them to taking 4 percent of their retirement portfolio each year as income. One of the key assumptions with this rule of thumb is that there will be a 30-year period in retirement. Realistically, however, should a person retiring at age 75 assume they will live 30 years – to age 105? Because of their late retirement age, shouldn’t they be able to withdraw more than 4 percent of their retirement portfolio each year without fear of exhausting their savings?