March 14th, 2012|
There is a new taxonomy of aging, reports the Houston Chronicle.
Where once turning 65 made you “old,” demographers now identify three groups:
- The “young-old” are those between 65 and 74;
- The “old” are between 75 and 84; and
- The “old-old” are 85 and older.
The reality is that the young-old tend to have few disabilities; rising disabilities mark the period of being “old”; and being “old-old” is defined by living with disabilities.
Most new retirees have their bucket list of things to do. But many items on their list will require spending money now.
“I want to do these things now, while I can,” retirees say. “I don’t want to have some future disability make it impossible.”
So knowing what discretionary spending can actually be safely done during the young-old stage and how much to save for the future are the vexing questions.
A free program called Basic ESPlanner allows you to enter your household and financial information, assumptions about inflation, and returns on investment, etc. It then calculates a smooth standard of living until you die at an advanced age, such as 95 or 100.
Calculating your annual Medicare premiums (which are rising faster than inflation), your annual income tax bill, and other non-discretionary spending, it can then figure out an amount of discretionary spending for the rest of your life.