What Are the Best Options to Address Living Too Long in Retirement

Q. What are the best options to address living too long in retirement?

A. There are few good options you can pursue simultaneously.

1. Delay Social Security Benefits
Factors to consider when you decide whether to delay social security benefits or not:

• The amount you can get at different ages (from 75% at 62 to 100% at age 66 to 132% at age 70)
  
• The probability you can live to a certain age
• Your spouse' age and social security payments

2. Purchase an Annuity
You shouldn't use all your assets to do so, instead, allocate about a third of your assets to purchase either an immediate annuity or delayed payment annuity. While if you die early, you will lose to the insurance company, it's effectively a decision about whether you would like to leave something to your children or ensure you don't become a financial burden to them when you live too long.

3. Get a Reverse Mortgage
This should be your last resort. How much you will receive depends on:

• Your age or joint age
• The current and expected equity in the home
• The interest rate and fees
• The type of mortgage program (the HECM program is the most popular, see FHA Reverse Mortgages (HECMs) for Seniors on HUD.gov for more details)

The silver lining of reverse mortgage, the amount you receive is tax free, because it's treated as a loan to you.

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