According to government statistics, the average 65-year-old American is reasonably expected to live another 19 years. However, that’s just an average. The Social Security administration estimates that about 25% of those 65-year-olds will live past their 90th birthday. We were reminded of these statistics when we recently received the unfortunate notice that a long-time client had passed away. He and his wife were both in their 90s and living independently.
People often guesstimate their own life expectancy based on the age that their parents passed. Genetics obviously has a bearing on longevity. Modern medicine has also become a big factor in how long we can expect to live. Diseases that were considered fatal 50 years ago are treatable or curable today. For many people facing retirement and the end of a paycheck, the thought of someday running out of money is their biggest fear. And there is no question that living longer increases the risk to your financial well-being.
The elderly typically incur costs that the young do not. As we get older, visits to the doctor and the hospital become more frequent. There’s also the onset of dementia or Alzheimer’s that so many suffer from. As our bodies and minds age, we may not be able to continue living independently and may have to move to a long-term care facility.
We should face these issues squarely, especially as we approach retirement. Too many people refuse to face these possibilities and instead hope that things will work out. As the saying goes, “hope is not a plan.”
Here is a three step plan to help you remain financially healthy even if you live to be 100:
The idea of saving for a long retirement should not be avoided or feared. With the proper planning and preparation, retirement gives us the opportunity to enjoy the things that we never had time for while we were working, and can indeed be your Golden Years.
Arie J. Korving, a CERTIFIED FINANCIAL PLANNER™ professional, has been delivering customized wealth management solutions to his clients for more than three decades. Prior to co-founding Korving & Company, he was First Vice President with UBS Wealth Management and held management positions with General Electric.