Close to Retirement? Make Sure You Plan for the Right Life Expectancy (Many Don’t)


Most people would rather get a root canal than have a serious talk about life expectancy. We get it; it’s not the easiest of topics to discuss. But when it comes to planning for your retirement, you need to have an honest conversation with yourself about the subject.

One of the key factors in planning a comfortable retirement is making sure your money will last long enough. Too often, people fail to think about how many years they will need to provide for during retirement.

If you plan for 20 but you live another 30, then you’ll rely solely on Social Security benefits by those final 10 years. That may not be enough to cover your bills.

Take a thorough look at calculating your life expectancy. Then adjust your retirement plans accordingly.

Life Expectancy in the United States

To start, let’s look at general life expectancy in the U.S. The Social Security Administration says the average woman turning 65 today will live till 86.5 years old, while the average man will live to 84.

There are a lot of variables to consider, of course. Things that could influence your life expectancy include:

  • Genetics: How long did your parents live?

  • Health: Do you have any serious or recurring diseases, such as diabetes or cancer?

  • Smoking: Do you smoke?

And that’s just the tip of the iceberg. Lifestyle and environmental factors play almost a big a role as genetics, which have a large influence over your life expectancy. However, genetics’ importance rises once you hit 80. At that point, lifestyle has almost no input on how long you live. Genetics accounts for nearly all of it.

You can try out the Social Security Admission’s longevity calculator to get a rough idea of your life expectancy. Just remember that you should recalculate it as you get older.

Planning for a Longer Retirement

At first, you may think living longer in retirement isn’t a big deal. Maybe you planned for no mortgage in your golden years, so you figure living till you’re 90 vs. 85 isn’t much of a difference.

But if you had planned to live on $40,000 a year, you will have to reduce that to stretch it until you are 90. When you consider that health care expenses also tend to rise as you age, that could leave you in a pinch.

The SSA says that one in seven adults turning 65 this year will live to be 95, and that number will rise with advances in health care and treatment. Make sure you have the means to stay comfortable by projecting your life expectancy and adjusting your preparation for retirement. Some strategies may include:

  • Upping your contribution to your 401(k)

  • Decreasing the amount you spend each month on entertainment and increasing the amount you put in savings

  • Waiting to claim your Social Security benefits until you are 70

With the right planning, your retirement years can be enjoyable for many, many years. Need more ideas on how to save efficiently to match your life expectancy? Reach out to Jay to discuss your options.

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