Increased Longevity

People are living longer. Men who reach the age of 65 can expect to live almost another 18 years; for women, the remaining life span is almost 21 years.  These are averages; many will live well beyond these years. Increasing longevity has significantly altered not only retirement planning but also the concept of what and who is “old.” Moreover, with age comes the increased possibility of poor or declining health, which requires increased expenditures for medical care. An extended stay in a hospital or at-home nursing care could easily consume one’s lifetime savings.

The significance of increased longevity on retirement is clear: the more years a person spends in retirement, the more he or she can expect to confront the financial, physical, and psychological changes that are sure to come. The challenge of paying for a retirement that could last as long as 20 or 30 years—in some cases, almost as long as one’s working life—is daunting. But it is part of the new retirement reality. Without adequate retirement planning, “living too long” could become a reality.

The practical financial implications of longer life-spans must be incorporated into any retirement plan. This includes planning for longer (and thus greater) income needs and the possibility of expensive health-care treatment.