Most people don’t believe they’ll live to be a hundred, and it shows in the way they build their financial plans, if they have one at all. The projected age that people start thinking about retirement is 60 or 65, but what happens when you live past that age?

Nowadays, people are living much longer. For the purposes of financial planning, advisers are recommending that we plan for the age of 90 instead of just 65.

Pam Krueger of Wealthramp and Jessica Searcy of Searcy Financial share their insights on what the phases of retirement are, and how to make sure your money lasts until age 100 – or at least past 65!

When You Should Start Planning for Retirement

Though people are living longer, their financial plans regarding retirement don’t reflect that. Many people focus on saving money for retirement thinking that their savings will last them forever.

Unfortunately, the reality is that it won’t. To prepare for the future, we should be thinking about how we can generate more income from our savings and other resources.

What You Should Think About When Planning for Retirement

There are different aspects to consider when coming up with a retirement plan. One of the things that people find shocking to consider is health care. In fact, the bulk of a person’s savings goes to health care later on in their life.

No one really knows how much health care is going to cost, and so it’s an important factor to consider when planning for the future. Health care might cost differently at age 80 than it did at age 60 or 70 – what happens when you’re 80 and can’t take care of yourself?

This manifests in a person’s pre-retirement years – also called the first phase of retirement. These are the years when a person starts saving up for retirement, or the years that they should be saving up for an early retirement.

However, most people go into a quasi-retirement where they take a period off to spend their money doing whatever they’ve always wanted to do, and they do this with the mindset that they have another 20 or 30 years to do what they want instead of saving up to retire early.

The Second Phase of a Retirement Plan

This is where the second phase of retirement comes in. It’s the part of your retirement plan that’s crucial for when you can no longer take care of yourself and making sure your money can cover it.

According to Pam, the first phase is the most crucial part of retirement. It’s the point where someone has to put off tapping into their savings by continuing to work.

The reason for this is that no one knows how much they’re going to need their savings when they reach past the age of 65. We don’t know what’s going to happen to us or what we’re going to need, so the only thing we can do to avoid tapping into these resources is by continuing to work, even part-time.

Do you think your money will last if you happen to reach 100? How are you preparing for retirement? Share your thoughts in the comments below!