Plan for the Longest Retirement
Want some good news? Because of medical advances and healthier lifestyles, more Americans are living longer today than ever before. Once, a retirement of 10 or 15 years was considered normal. Now, it’s quite possible you may spend 20 or 30 years in retirement, if not longer. The chart below illustrates this point. A healthy man 65 years old has a 50% chance of living to 85 and a healthy woman has a 50% chance of living until 88. Some will live even longer!
Assets Must Last Longer
Despite these numbers, research shows that some financial professionals use a life expectancy of age 90 when developing retirement plans. But in doing so, one or both of the spouses may run out of money.
When developing a retirement plan, assume the longest possible retirement. You can then determine how much you should put aside for retirement every year so you don't outlast your savings. If you already have a plan in place, review it with your financial professional to insure that it's based on a lengthy retirement. He or she can also take a fresh look at your savings and investment strategies to be sure your plan will meet your long-term needs.