The retirement age has gradually increased over the past few decades. At present, the average age of retirement is 67 years old and the average life expectancy is 79. This means there are roughly 12 years that must be accounted for when planning retirement.

The times are changing, and so is the way retirement looks for the younger generations. Let’s dive into how the retirement age will change, how much money should be saved to prepare for retirement, what living situations might be more prevalent during retirement years and a few alternatives to retirement.

Retirement age

Social Security and Medicare trust funds have been having trouble keeping up with the benefits they have been sending out for years. In the near future, we can predict that there will be changes in how benefits are distributed. One of the changes that has been suggested is to change the retirement age to 70, making it so retirees receive benefits over a shorter period of time.

Although we have a good prediction of when we will retire and the average age at which people might pass, life itself can be very unpredictable. Staying on top of the trends and planning accordingly will make for a relaxing retirement.

Preparing financially

Planning for retirement can be stressful, especially when you don’t know how long to plan for. You may need to plan for 10 years, or you might need to plan for 20. The reality of the situation is that nobody really knows how long they will live for or how long they will be able to stay in their career due to unforeseen circumstances. The best we can all do is to plan for the best.

A good rule of thumb to follow is planning to save 15% of your pre-tax income for each year you expect to be retired. The following are plan options that can help you reach your goal:

• 401(k).
• Simplified employee pension.
• Payroll deduction IRA.
• Profit-sharing plan.
• Defined benefit plan.

There is no one right plan to choose. Each one will have its own unique benefits. Ultimately, choosing one that fits your needs will give you the greatest return.

Retirement living

Have you thought about where you will live after you retire? There are plenty of options to choose from, including staying at your current home, downsizing to a retirement home, or moving across the world. Taking a leap of faith to move may be the new adventure you need during retirement. With the various living situations one can pick from, it is important to have in mind what you think would suit you best in order to make financial accommodations.

If you choose to travel, each country will have its own regulations. For example, some may require you to earn a certain amount of income, and each country will vary in living expenses. For retirement homes, you can expect to pay $1,500 to $4,000 a month.

Alternatives to retirement

Just like anything else in life, retirement will look different for each individual. While some may happily retire and never think about working again, others would like the opportunity to explore alternatives to working a full-time job.

Working part time or volunteering seems to be a rising trend that has many benefits. One of those benefits is generating additional income to help support a more comfortable lifestyle. So, if you are among those who would like to keep their body and mind active even after retirement, consider looking into a passion job.

Planning ahead will relieve a lot of stress later on in life. Your financial plan should reflect the changes of retirement age, living situations and other retirement goals.

Lindsey Certonio is a project manager at Fullcast, a Silicon Slopes-based, end-to-end RevOps platform that allows companies to design, manage and track the performance of their revenue-generating teams.

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