Retirement Planning

The importance of being financially prepared for a long retirement.

There is an old 1940’s song by Albert King titled “Everybody Wants to Go to Heaven but Nobody Wants to Die.” That could become a theme song for the baby boom generation. Living to 100 is becoming commonplace. Remember the days (and if you are reading this, you probably can remember) when Willard Scott on the Today Show congratulated each person turning 100 that day by name and photo. That’s a bygone era.

 

Today there are well over 53,000 centenarians in the US alone, and it is one of the fastest growing demographic segments. Visit the greeting card section in the local supermarket to see the extensive selection of how many “It’s Great to Be a 100” cards there are.

 

More than 80% — nearly 85% — of those over a 100 are women. This raises significant retirement and financial planning concerns for them and the men they outlive. The current World’s Oldest Living Person is a woman who is 116. She’s just about the only one left born in the century before last! Her husband passed away when he was 94 years of age and still she’s been a widow for almost a quarter century.

 

Traditional retirement programs are ill-equipped to address the issues of being retired for as long – or longer – than the years spent gainfully employed. Think of the difficulty of a 40 year career needing to support a 50 year retirement. Even 25 or 30 years of retirement is very a long time. Medical research keeps developing new ways to live longer, and it will take some of the best retirement strategies and plans to guide people through it.  And almost certainly it will be a family effort – all working together in succeeding generations – to enjoy such a long and leisurely time. There is talk that 120 will become the new 100.

 

The older you get the less likely you are to die

 

Yes, the older you get the less likely you are to die. There is an irony to that, isn’t there? What it boils down to is that every year there are people in each age group who for one reason or another die. It can be caused by disease, accident, or a host of other things. For each year we sidestep death our odds of living improve … at least a little.  According to The Social Security Administration a man 70 today is expected to live to 85.5 years of age; a man 60 today is expected to live to 83.5 years of age. However, if he lives to be 70, his life expectancy increases to 86.1 years. A hundred year old woman today – a rapidly increasingly phenomena – has another 2.5 years of life expectancy. If she lives to be 102 she then has another 2.2 years expectancy.

 

It is a blessing that none of us know the time or place. There are many things which contribute to living: current (and future) health, lifestyle, gender, family history and just plain luck all are factors. It is interesting that life insurance companies can tell us very accurately how many people at any particular age are going to die in a given year. They just can’t tell us who they will be.

 

Everyone has uncertainties in his or her life. That is why a solid financial plan designed to help get through those uncertainties and many years of retirement is so crucial. Crucial not only for yourself, but your spouse, your beneficiaries, your charities, and your peace of mind.