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The Good News: Americans Are Living Longer. The Bad News: Your Money Has to Last

The Good News: Americans Are Living Longer. The Bad News: Your Money Has to Last

July 27, 2023

Americans are living longer than ever before. In fact, the average life expectancy in the United States is now 78.6 years. This means that many people are now planning for retirement which could last 30 years or more.

This increase in life expectancy has a few implications for financial planning. First, it means that people need to save more money for retirement. If you plan to live to 100, you will need to have significantly more saved than if you plan to die at 80.

Second, it means that people need to be more careful about how they invest their money. If you are planning to live a long time, you need to make sure that your investments are diversified and that you have a plan for generating income in retirement.

Third, it means that people need to be more open to different types of retirement income. In the past, Social Security and pensions were the primary sources of retirement income. However, as fewer and fewer people have traditional pensions, it is important to consider other options, such as annuities and even reverse mortgages.

There are a few things that you can do to start planning for a long retirement. First, you need to estimate how long you think you will live. There are online calculators that can help you with this. Once you have an estimate of your life expectancy, you can start to calculate how much money you will need to save.

Second, you need to develop a retirement income plan. This plan should include a mix of different sources of income, such as Social Security, pensions, annuities, and investments. You should also consider how you will generate income in retirement if you live longer than expected.

Third, you need to work with a financial advisor who can help you to create a personalized financial plan (that’s us). A financial advisor can help you to assess your needs, develop a plan, and track your progress.

Planning for a long retirement can be daunting, but it is important to start planning early. By taking the time to plan now, you can ensure that you have a comfortable and secure retirement.

Here are some more considerations for financial planning for a long retirement:

  • Start saving early. The earlier you start saving, the more time your money has to grow.
  • Save as much as you can. The more you save, the better off you will be in retirement.
  • Invest wisely. Choose investments that are appropriate for your age and risk tolerance.
  • Rebalance your portfolio regularly. This will help to ensure that your investments are still on track for your retirement goals.
  • Consider long-term care insurance. This can help to pay for the cost of long-term care, such as a nursing home.
  • Talk to a financial advisor (again, that’s us). A financial advisor can help you to create a personalized financial plan for your retirement.
  • The cost of healthcare is rising, so you need to factor that into your retirement planning.
  • You may need (or may want) to work longer than you originally planned.
  • You may need (or may want) to downsize your home or move to a more affordable area.

It is important to start planning for a long retirement as early as possible. By taking the time to plan now, you can ensure that you have a comfortable and secure retirement, no matter how long you live.

 

 

 

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The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All investing involves risk including loss of principal. No strategy assures success or protects against loss.