But What if You Live? The Financial Realities of Longevity

retirement strategy

By Krista McBeath, McBeath Financial Group

I find no humor in aging or death, so let me be very upfront about that. However, I am sometimes bemused by the outlook some people have on their passing. I am perplexed by the mind-shift of some healthy aging people that they begin to anticipate the worst, and expect to pass at any moment, based solely upon their age!

As an example, I know a couple that says, “…If we’re still around then” when planning any future event. Of course, it’s good to be prepared, but you would think that death is looming right around the corner for them. Of course, any of us could go at any time, but I think it’s a safe bet they will be around for Thanksgiving!  Yes, they are aging, but by all standards, they have great overall health. 

I understand their thought process that they are (now) near the average life span, but those are averages from birth!  This particular couple was surprised to learn that a 76 year-old male has about a 50 percent chance of seeing his 90th birthday!  I’d also being willing to wager that the wife will be around at least another 20 years!

There are others that want to avoid planning or making hard decisions about their future, with the belief that they will suddenly keel over before they have to face the consequences. These are the same people you might hear say, “If I’d known I was going to live so long, I would have taken better care of myself!” And of course, I would add in that they might have better prepared themselves for their financial future, by saving and planning. They’re going to need it, because here’s a dose of reality when it comes to longevity!

What will be your future? You know that solid retirement strategy takes your time horizon—an often unpredictable factor—into consideration. Your thinking must include an awareness of how long you must save for and what sort of expenditures may be ahead. 

The most recent findings from the Centers for Disease Control and Prevention indicate that the average American male lives to age 76, while a female may live to 81. The numbers also take the quality of life into account, putting male and female Americans at “full health” for 67 and 70 years, respectively.

What do these numbers tell us? Women live longer, for one. Based on your age and the age of your spouse, you can make estimates; you may live longer or less, but averages offer us a window that can be used to plot that retirement strategy. One reality unnoticed in these numbers is that some women may live on their own for many years. If a woman has spent many years as part of a household, living alone shifts the responsibility from two people to one, removing any extra income their partner or spouse contributed. 

According to the Social Security Administration, single women aged 65 and up (including both the unmarried and the widowed) rely on Social Security payments for 45 percent of their total income. This compares to 33 percent for single men of a similar age and 28 percent for the married couples in that bracket.

What does that come to in dollars and cents, per year? The most recent tally, based on a 2018 fact sheet, is $13,891. (Men: $17,663.) These are today’s numbers, but they underscore the importance for a retirement strategy that looks at your specific needs and goals—an approach that considers your future health expenses, your day-to-day expenses, as well as the things you want to do for enjoyment in retirement (travel, pastimes, family experiences, and more).

How do you create a strategy that can adapt to life’s events? It’s true that we all will pass away and no one knows when. You can’t plan for the day it happens, but you can develop a plan that works in life and beyond for your heirs. Working closely with a financial advisor may help you to create an approach that’s based on your unique goals, risk tolerance, and take into account your ever-changing time horizon. 

Regardless of your age, you deserve to live every day as if it’s a gift. Never let financial uncertainties or fear of the inevitable rob you of enjoying this precious time in your life.

Krista McBeath is an Investment Advisor, Chartered Financial Consultant, a Licensed Insurance Advisor, a Fiduciary, and an experienced tax advisor who specializes in financial planning, investments, and insurance. Phone 309-808-2224 or email [email protected] for appointment information.

Advisory services are offered through Landmark Wealth Management Inc, dba McBeath Financial Group, an Illinois Registered Investment Advisor firm. Insurance products and services are offered through McBeath Tax and Financial Services, LLC. McBeath Financial Group and McBeath Tax and Financial Services, LLC. are affiliated.


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