Suze Orman Says '70 Is The New Retirement Age' — But Is She Right?

In a column, personal finance expert Suze Orman emphasized the importance of delaying retirement until age 70. 

According to Orman, "Seventy is the new retirement age, not a month or year before." She explains that increased life expectancy means retirement savings must last longer. "You likely have plenty saved up to breeze through 15 years or so of retirement. But, if you stop working in your 60s, your retirement stash might need to support you for 30 years, not 15," she wrote on Money.

Orman's advice is backed by research from the Stanford Center on Longevity, which suggests Americans would benefit from a later retirement age. After examining 292 retirement income strategies, the research team found that delaying Social Security payments until age 70 is a key component of the best strategy for most people, known as the "spend safely in retirement" strategy.

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Drawing from her experience from her CNBC show, where she often gave viewers failing grades when they aimed to retire in their early 60s. "I gave out a lot more D's and F's than A's," she recalls. Orman warns that retiring before 70 can be financially dangerous, especially considering that healthy individuals in their 60s today have a 50% chance of living into their 90s. 

Orman also highlights the high cost of health care in retirement, noting that Medicare only covers about 70% of expenses. Retirees are responsible for the remaining 30%, which includes premiums, supplemental coverage, drug coverage, and out-of-pocket expenses. 

The financial guru advises delaying Social Security benefits until 70 to secure a financially stable retirement. "Wait until 70 and your annual benefit will be 76% higher than what you're eligible for at 62," she explains. For married couples, she stresses that the higher earner should delay benefits until 70, while the other spouse can start earlier, though ideally not before age 67.

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Orman encourages pre-retirees to plan for extended work life well before reaching their 60s. She recommends discussing reduced job roles with employers and taking advantage of training and educational opportunities to stay relevant in the workforce. 

"So I want each and every one of you to make working until 70 (or later) your goal," Orman urges. While acknowledging that working until 70 can be challenging, Orman believes it is essential for a secure retirement. "Every dollar you don't spend in your 60s is a dollar that can keep growing for your 70s and beyond," she notes. She urges individuals to take proactive steps now to ensure a worry-free retirement later.

Orman's message is clear: a strategic and well-planned approach to retirement can empower individuals to navigate their 60s confidently and enjoy a secure and fulfilling retirement.

However, it's important to consider both sides of this approach. Risk is involved while delaying retirement until 70 can maximize retirement savings and benefits. Health issues or unexpected life events can make it difficult to continue working into one's late 60s and beyond. Additionally, some people may not have the physical or mental stamina to work until 70, and life expectancy is always uncertain. Balancing the need to maximize savings with the realities of aging and individual circumstances is crucial.

It's always a good idea to consult with a financial advisor to find the best plan tailored to your situation.

What are your thoughts on Orman's recommendation to delay retirement until 70 (or later)?

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