How Living Longer Can Impact Your Retirement (And What You Can Do About It)

 

While most everyone has specific retirement dreams and goals, the way we are able to spend our time during that phase of life will depend largely on the amount of income we're able to generate. But the true “X-factor” is the amount of time we’ll need that income to last.  In the past, many people did not need to plan for 20 or more years in retirement. But according to the Social Security Administration1, life expectancy today – on average – looks like this:

  • A 65-year-old woman will live to be 86.6
  • A 65-year-old man will live to be 84.3
  • 25 percent of all Americans will live to be 90 or older
  • One in ten will live to age 95

Living a long life should be its own reward, but with so many unknown variables, how can you be sure you'll have the income you need for as long as you need it?

Since living longer can expose you to several financial risks for a much longer period of time, there are many experts who deem longevity as being the biggest challenge in retirement.

When it comes to generating income in the future, simply setting money aside in a savings or investment account is only a small part of the solution. Stretching out your future retirement income stream can be done with some careful income planning. As you know, the sooner you put your plan in place, the sooner you can take the necessary steps to get there (and feel more confident about your financial future).

Most people can expect to spend two decades or more in retirement. As a result, how you plan for income in retirement has changed a great deal — and it can be challenging to ensure that you have what you need if you live a long life.  

The Unpredictability of Future Income

When saving and planning for future income, there are a variety of risks that can come into play, including everything from stock market volatility and inflation to rising health care costs.

In fact, longevity is a multiplier for your exposure to all of these risks. In other words, the longer you live, the greater chance you’ll be impacted by them. These risks can be minimized by securing guaranteed income and is something those nearing or newly retired should consider as part of their overall retirement strategy.

Help Ensure Steady Retirement Income, Regardless of How Long You’ll Need It

Although living longer can allow you to spend more time doing things you enjoy, if you don't have a reliable income stream in place, it could mean having to cut back on the purchases of goods and services you need.

But there are measures you can take now to help ensure you don’t outlive your money. To learn more about how to plan for this top retirement challenge, download the free e-book, Longevity Risk & Retirement: Address the fear of outliving your money, or contact a Heyday Retirement representative to discuss your unique retirement income goals and concerns.

Source:

1. Social Security Administration. Calculators: Life Expectancy. https://www.ssa.gov/planners/lifeexpectancy.html

Materials offered by Heyday Retirement, including articles, ebooks, and workshops are designed to provide general information on the subjects covered. They are not intended to provide specific financial, legal or tax advice. Heyday markets insurance products and its representatives do not give investment, legal or tax advice. You are encouraged to consult your tax advisor, attorney, or investment advisor.
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To learn more about how you can reduce your financial risk in retirement, download the guidebook,

Longevity Risk & Retirement

DOWNLOAD THE GUIDEBOOK
Cindy Collins

Written by Cindy Collins

Forbes Contributor & Retirement Financial Professional

Cindy Collins is a Heyday Retirement contributor with over 30 years of experience in personal financial services.

Heyday is a premier source for comprehensive tools and informative content designed to help retirees build a secure retirement income plan.

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