Living Longer With Plenty Of Money

Happy senior man and woman couple sitting together outside in sunshine wearing white bathrobes celebrating drinking white wine ChampagneJ. Craig Venter of Human Longevity, a genome sequencing company with the objective of extending healthy human life, believes that individuals can live into their 90s “with good health and vitality.”  The reason?  Life expectancy is increasing for men and women.  Those born in 2013, for example, can live up to 76 and 81 years of age – an 8 year increase for women and a 10 year increase for men over the last 50 years.  For 65-year-olds, approximately 25 percent will make it past 90; and, in the same age group, individuals now have a 10 percent chance of living past 95.  This adds more pressure to retirement planning with advisors and clients trying to financially cushion additional years in retirement.  One might consider how you and your financial advisor will strategically create an extended long-term retirement plan.

What Are Advisors Saying?

There is a significant challenge in estimating lifespan and physical activity for clients. Steve Vernon, research scholar in the Financial Security Division of the Stanford Center on Longevity, said:

“If anything, the Census Bureau underestimates life expectancy. It’s just an average. The challenge for advisors is the uncertainty of how long clients might live and how active they are going to be. They’re going to have to help clients think through the consequences of living longer and help them avoid making dumb decisions.”

Dr. Steven Podnos, principal of Wealth Care, recommends telling older clients to continue working. With a background as a medical doctor turned CPA, he acknowledges both the medical advantages available in their lifetime and the additional budget that should be created for the possibility of an extended lifespan.  Podnos shared:

“The most important planning advice I can give my clients is that they should work longer than they thought they would. There’s no reason why they can’t work until their 70s. It doesn’t necessarily have to be full-time, but they should be producing income at least on a part-time basis.”

Potential retirees have the opportunity do a lot before retiring.  They can continue working loyally for a company or turn to the “on-demand” economy for opportunities to work part-time.  Additionally, they can even use their knowledge and resources as entrepreneurs by opening businesses or selling products online.  The Kauffman Institute reported that entrepreneurs aged 55-64 have generated the highest rate of business creation over the last decade.

How to Live Securely

Retirees should account for covering medical costs as well as costs of living.  Advisors guide clients on a number of factors affecting longer-term retirement planning.  Examples of such factors coming into play include projected lifestyle, location, personal relationships, and housing arrangements (including retirement communities, co-housing or multigenerational living, for example).  Advisors recommend that their clients wait until 70 to claim Social Security. They further recommend that clients set aside more money for their savings.  Finally, those over 55 should take advantage of an HSA in order to save a maximum of $7,650 tax-free annually.

Creating an extended longevity plan means that going forward, potential retirees have to anticipate their needs – financially, socially and medically – much further down the road than in previous decades.  Think about it: what will you need at 80 or 90 years of age?

For further questions and answers, contact me at The Windsor Group, Ltd to review where you stand and tailor a retirement plan that can meet your unique situation.

 

 

 

 

The foregoing content reflects the opinions of The Windsor Group, Ltd. and is subject to change at any time without notice.  Content provided herein is for informational purposes only and should not be used or construed as investment advice or a recommendation regarding the purchase or sale of any security.  There is no guarantee that these statements, opinions or forecasts provided herein will prove correct.  Past performance is not a guarantee of future results.  Indices are not available for direct investment.  Any investor who attempts to mimic the performance of an index would incur fees and expenses which would reduce returns.  All investing involves risk, including the potential for loss of principal.  There is no guarantee that any investment plan or strategy will be successful.