My father-in-law is 96. Kirk Douglas was 103 and his wife is 102. Olivia de Havilland is 102. It is estimated that there are currently living 150 to 600 people alive who have reached 110 years old. 1
As our lifespan has increased, it has allowed many people to enjoy retirement for much longer than retirees just a few decades ago. For instance, for many in the Baby Boomer generation, it is not uncommon to see 20 or more years after you have stepped out of the world of employment.
According to the Social Security Administration, a man who turned age 65 on April 1, 2020 can expect to live (on average) until age 84. A woman who turned 65 at that same time can anticipate on average to live until age 86 ½.2
That’s the good news.
But living a nice long life can come with some financial-related penalties, too, unless you have a good, solid plan in place. In fact, while longevity can certainly be positive in many ways, it is actually a “multiplier” of all the other financial risks to your assets and retirement income – including market volatility, inflation, and healthcare expenses – because you have to face them for a longer period of time.
So, how can you plan ahead for a secure retirement, regardless of how long you may live?
There are several things you can do. For one you can narrow down the ideal time to start taking your Social Security benefits.
This is a routine process that we put everyone through because making the right choice in Social Security is very fundamental to your retirement income plan.
It also can be very confusing because there are over 81 choices for a couple to choose from. It’s like when I used to go to Baskin Robbins for ice cream (before becoming a vegan) and I looked at their 33 flavors. They all looked great, but I couldn’t choose until I narrowed down the choice to 2 or 3 flavors.
We do the same thing when advising clients on Social Security, by helping them choose the top 2 or 3 strategies that work best for their specific situation. In many cases, this has added an additional 5 to 6 figures to many of our client’s lifetime benefits that they will receive.
There are, however, many more steps to consider beyond Social Security in creating a retirement income plan. Things such as in-depth details about maximizing your incoming cash flow, as well as planning ahead for any “gaps” you might have between what you have coming in, and what you need for expenses.
This is ‘part art and part science’ so we are guided by the use of a 25-point checklist, that I like to call our Income Alchemy Checklist.
Because of this it is recommended that you work with a professional who specializes in this area of planning, and who can convert what you have saved into a secure income for life.
BOTTOM LINE: The goal of a written income plan shows you 4 simple things:
- When your retirement paychecks are going to start
- Which part of your retirement assets they’re going to come from
- How long those paychecks are going to last, and
- How they will grow over time to keep pace with inflation
Best to YOU always,
- Benefits Planner / Life Expectancy. Social Security Administration. https://ssa.gov/planners/lifeexpectancy.html