The new retirement age for Americans should be 70, according to personal finance guru Suze Orman, who agrees with Stanford researchers in saying that the typical American would benefit from a later retirement.
This is because Americans are living longer and now have to stretch their retirement savings out, CNBC News reported.
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“You likely have plenty saved up to breeze through 15 years or so of retirement,” Orman wrote for Time Money.
However, she pointed out that, should the typical American stop working in their 60s, their retirement may need to sustain them for 30 years, not just 15.
This coincides with new research by the Stanford Center on Longevity, which identified delaying Social Security payments until the age of 70 as the best strategy for most people to withdraw their money in retirement, CNBC said.
This method is referred to as “Spend Safely in Retirement Strategy” and puts age 70 as the new 65 in terms of retirement.
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“The best way for an older worker to implement the Spend Safely in Retirement Strategy is to work just enough to pay for living expenses until age 70 in order to enable delaying Social Security benefits,” researchers wrote in a report.
“To make this method work, retirees may also need to significantly reduce their living expenses.”
Orman noted that, while it was ideal to work full time until the age of 70, this was not always a reality, but she noted that part-time work could also make a vast difference to retirement savings.
Commenting on the delayed retirement age, Steve Vernon, head of the Stanford research team, told CNBC: “Suppose Social Security at age 65 would have been $20,000 per year and you're delaying it for five years. That's $100,000. So you set aside $100,000 and that's what you withdraw from age 65 to 70.”
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