Planning for Longevity

The meaning of longevity is “a long individual life; great duration of individual life.” So here is a question to consider: How much will longevity cost us in retirement?

In a recent article in the Wall Street Journal, Charles Passy attempts to answer this question. Here is a quote from his article that sum up his answers:

Retirement Planning is Changing

“…To prepare for four additional years of lifespan over current projections, someone who’s 50 years old now would need close to $160,000 beyond his or her current retirement savings to maintain a modest lifestyle, experts say. And increasing a nest egg by that much, assuming historical rates of return and inflation, could mean squirreling away an additional $2,500 a year.”

There is an additional point to be discussed in this “positive” prognosis of longer life, that is the quality of that longer life. Simply put, not only are we going to be living longer, but we are going to be living better.

While this is a great thing, what does it mean for our budget? It will certainly affect our activity level and thus how much we spend. Our parents and grandparents may have spent the majority of their golden years at home reading. But the next generations of retirees are going to be out and about; travelling, boating, dining, hiking, and doing all of those other things that we never got a chance to do while we were working.

Here’s the thing. All of those great activities cost a lot more that a subscription to the newspaper delivered at home. This means that your initial estimates of how much income you may need later in life may be lower than what you will actually require.

How Should We Plan and Prepare?

Okay, so obviously securing enough savings for these many golden years may seem like a big, if not difficult, task to accomplish, especially given the current investing climate. What can we do to keep up with the financial needs tied to our own health and longevity?

First, we need to get an accurate calculation of how much income we require. As we already discussed, this is going to vary depending on our lifestyle. Once we have this number in mind, according to Dr. Porkorski, we have to throw out our the general calculation of how long we will live, because statistics say that we are going to live much longer than the current government calculations tell us. Now, how do we assure that we have that level of income for as long as we might live?

Enjoying Lifelong Retirement Income Security

While many possible instruments exist, there are several products that will actually provide an individual with income for their entire lifetime after they retire. You can enjoy greater peace of mind, knowing where your money will be coming from month-to-month to pay for your lifestyle.

You can maintain a steady income stream that lasts as long as you need it. This starts with an initial goal-setting appointment where we discuss your goals, needs, desires, and overall financial picture.

If you are ready to talk over possible solutions for your lifelong retirement income needs, we would be glad to help you get started. For more information, please call us at 925-287-8880 or request a meeting.