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Six Steps You Can Take to Financial Prosperity

Six Steps You Can Take to Financial Prosperity

USA Today

Working longer can pay dividends

If you retire at 55, you could live 30 or 40 more years. And unless you’re very wealthy, your savings might not last as long.

Even retiring at 62 — when most people become eligible for Social Security — is risky, says Jack VanDerhei of the Employee Benefit Research Institute. Employer-provided health coverage for retirees is increasingly rare. And without it, you’ll have to pay for your own insurance until you’re 65, when you become eligible for Medicare.

In most cases, you can buy “Cobra” group coverage from your former employer for up to 18 months — if you pay the premiums, plus administrative costs. But if you’re not yet 65 at the end of that period, you’ll have to buy an individual insurance policy or go without. Many retirees are shocked at how much such policies cost. If you have health problems, you might not be able to buy health insurance at any price.

Though Americans are working longer, most of them aren’t working long enough to provide for a secure retirement, VanDerhei says. By the time they realize they haven’t saved enough, he says, it’s often too late: “It’s really difficult to get into the workforce at age 70.”

His advice: Project an estimate of how much money you’ll need to live on. Retirement calculators on the Internet can help, though most workers fail to take advantage of them. Instead, “They shoot from the hip,” VanDerhei says.

“They can’t stand their boss, had a bad day or a bad commute, so they think they’re going to retire,” VanDerhei says. “They just don’t do the calculations.”

By Sandra Block

More than ever, invest prudently

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