“As a man grows older, his medicine cabinet grows bigger.”
That quote, from the 1948 film “Heaven Can Wait,” certainly seems to hold true 60+ years later as lifespans stretch longer than ever. One in seven Americans are 65 or older, and there are now approximately 70,000 Americans living past the age of 100 — twice as many as there were 20 years ago.
Living longer is definitely a positive, but as it becomes common for Americans to live deep into their 80s and 90s, there’s also a need to save more for retirement. Inflation and medical expenses will continue to rise, and if you retire in your 60s, retirement could last upward of 30 years.
[CLICK HERE to read the article, “Nursing in an Aging America,” from NursingSchoolHub.com, June 1, 2015.]
If you believe you have sufficient retirement assets but are worried about making them last a lifetime, please contact us. We have retirement income strategies using a variety of insurance products that may be appropriate for your situation.
[CLICK HERE to read the article, “3 Things You Can Do to Increase Your Chances of Living to 100,” from Health magazine, April 18, 2016.]
Of course, one way of funding a long retirement is to work longer. This enables older workers to save more and delay taking Social Security, which will increase their benefits. Many may not have enough saved up to retire in their early 60s, but Alicia Munnell, director of the Center for Retirement Research at Boston College, said 85 percent of households would be adequately prepared if they worked to age 70.
Munnell proposed increasing payroll taxes by 2.6 percent to “fix” the pending drain of the Social Security Trust Fund for another 75 years; a 4.0 percentage point increase would be necessary to help the cause longer term.
It’s important to recognize that working longer doesn’t necessarily mean working full time, nor does it require you stay at the same job. There are now twice as many entrepreneurs 50 or older than those younger than 25, and entrepreneurs aged 55 to 64 represent the highest rate of business creation over the past decade.
[CLICK HERE to read the article, “Saving’s Not Enough” from Financial Advisor, May 5, 2016.]
[CLICK HERE to read the article, “Clients are living longer, putting pressure on retirement advice,” from Financial Planning, May 2, 2016.]
A recent study has found that because of today’s longer lifespans, the original way Social Security was set up now actually favors wealthier people. That’s because wealthier income earners (particularly the top 1 percent) tend to live longer, presumably due to better health care options and the ability to afford a healthier lifestyle.
Someone with a $2 million salary who begins drawing Social Security at age 66 and lives another 20 years will wind up receiving substantially more benefits than someone who earns less and doesn’t live as long. So, not only is the income gap growing larger between the rich and the poor, the lifespan gap is increasing as well.
The richest 1 percent of Americans typically live to 87, having gained three years of life expectancy from 2001 to 2014 alone. On the other hand, people who earn $30,000 or less a year die, on average, closer to age 78 (and had almost no lifespan gain during the same timeframe).
[CLICK HERE to read the article, “Rich People Are Living Longer. That’s Tilting Social Security in Their Favor.” from The New York Times, April 22, 2016.]
[CLICK HERE to read the article, “The rising longevity gap between rich and poor Americans,” from The Brookings Institution, May 3, 2016.]
Content prepared by Kara Stefan Communications.
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