On this weekend’s segment of Better Money Atlanta, Joel Johnson, CFP® discusses how retirement planning can differ from generation to generation. Factors like pensions, Social Security, life expectancy, and health care all play a role in the shifting of planning for your retirement.

Pensions are not as common

Less and less employers are offering pension plans and instead offer other contribution plans like 401(k)s. Most of us will not be able to survive on just Social Security and pensions like our grandparents did; We will need income from additional sources.

Changes in Social Security

Joel Johnson, CFP® talks about Social Security and how changes have affected himself and others. Back in 1983, President Ronald Reagan signed a legislation for the gradual increase of full retirement age. Full retirement age is the age you can start collecting your full Social Security benefit with no deductions. For those born in the year 1937 and before, their full retirement age is 65. People born in or after 1960 can receive full benefits at age 67. For everyone in between, their full retirement age depends on their year of birth.

Life expectancy increases

The United States has seen a gradual increase in life expectancy over the years. With this comes a longer retirement, suggesting that you will need more money. It’s important to keep up with inflation, so be sure you can give yourself a raise of 2 or 3% yearly.

Health care expenses

Health care can be a giant expense, as many retirees find themselves spending hundreds of thousands of dollars – especially if long-term care is required. It’s recommended to set aside money that will be used to contribute towards these expenses; It will help offset any unexpected costs and not dig into your savings.