Life Expectancy: Can You Afford to Live Longer?
For the first time, people born today have a life expectancy of 90 years of age, according to revised mortality tables published by the Society of Actuaries. This represents an astonishing increase over the past century. In 1900, newborns could only expect to live to the age of 50. Now, a big question looms―how can the average person pay for all these years?
In the last 100 years, extended life expectancy was interrupted by War and the Great Depression, and only fleetingly since. Medical science and advances in health and nutrition have stretched lifetimes by a year or more every decade.
This extraordinary expansion changes every phase of human life, stretching out middle age and delaying retirement. 50 years ago, reaching age 65 meant automatic retirement and imminent infirmity. Today, millions of 65-year-olds are active in the workforce and seeking new pursuits, knowing they have many good years ahead.
According to the revised tables, which measure the longevity of those who hold pensions or buy annuities, a man at 65 can expect to live to 86.6—up from 84.6 in 2000. A woman at 65 can expect to live to 88.8—up from 86.4 in 2000. For many, these extra years will be lived in relatively good health.
However, every few extra years of life expectancy comes with a price tag. Many private and public pension funds are underfunded—and this is only one of many things that may lead to a further erosion of individuals’ financial safety nets. With life expectancy on the rise, your planning should include ways to create potential lifetime income and creatively plan for long-term care should you need it.
Greg Hammond, CFP®, CPA is a wealth impact strategist who works with individuals, families, closely‐held and family‐owned businesses, helping them grow and preserve wealth, plan for retirement and manage their charitable giving. You can reach Greg at (800) 416-1655 or email@example.com for financially intelligent guidance or a Wealth Impact Assessment to show how you can build a legacy of your values, influence, and money without sacrificing your own lifetime goals and objectives.