The Long Winding Road: Record high Lifespan Means Baby Boomers Should Re-Think Retirement Planning

Life expectancy in the United States is at an all-time high which has major implications for the way Americans should plan financially for their retirement years. Thinking of post-retirement in stages may be one key to making more sound money decisions.

COLT’S NECK, NJ – 14 Jan, 2017 – Americans are living longer than ever before. Life expectancy in the United States is on the rise. The National Center for Health Statistics reports the estimated average life span of Americans reaches approximately 81 years for women and about 76 years for men. That’s good news but the great news is if you make it to 65 which means you didn’t die in the crib or by doing something foolish as a teenager, your expected life expectancy increases dramatically. According to the U.S. Census Bureau, for men, it rises to just about the mid-80s and for women it goes up to the late 80s. Americans are not only living longer they are living stronger staying more active than previous generations especially in the first stage of retirement.

In his recent article for, Richard Weinberg notes that per current Social Security Life Table Charts, the fastest growing sector of the population are people over 65, and 20% of men will live to 90 and over 30% of women will live to 90. Like most things in life there’s two sides to everything, living longer is great but it comes with some challenges. The number one concern of retirees in the United States is running out of money the second major concern is the rising cost of healthcare which is increasing at more than twice the rate of inflation.

For planning purposes Weinberg explains to his clients “It’s helpful to break post-retirement into stages,” Weinberg says. “If a person is 60 and hoping to make their money last until 100, thinking of those 40 years in increments of degree of activity, ranging from being very active between 60-75, a bit less active from 75-85, and even less active from 85 on this approach can help devise a financial plan that matches the expected level of activity.”

We learn a lot from previous generations but we can’t follow their lead when it comes to retirement planning today. When past generations retired they were able to go down to the local bank and lock in a great fixed rate of return to live on during retirement. Based on current longevity statistics it’s possible that many American will live another 30-50% additional years in retirement without their working income. If the inflation rate is 3-4% this means every ten years you’re losing 30-40% of your buying power, and 60-80% over twenty years.

Just like during your working lives it was important for your income to stay pace with inflation it will be just as important during your hopefully long retirement. The financial goals of previous generations were to lock in a safe fixed rate of return, the current generation of retirees should have a plan that will provide a safe rising rate of return. A retiree who is 65 today will not have the same lifestyle if he is earning the same income at 85 and beyond.

Retirement accounts like IRAs and 401Ks which are the primary saving vehicles for Americans, are typically subject to the fluctuations of the stock market and therefore risk of loss of principal. Weinberg points out, however, that these have not always been the primary means of saving money for retirement. “This is the first generation that has been encouraged to gamble with their retirement money and put it at risk by investing it in the markets.”

People should realize there is a difference between investing their retirement savings in the stock market when they are young and still working; if the market goes down and takes years to recover they have their income to rely on. It can be a much different experience when you’re retired without your working income, if the market goes down and you need the money and are spending it during those years it can make it much more difficult to recover your principal. Weinberg and his wife emphasize safe investment choices for clients who are near or are already in retirement.

Though the prospect of retirement planning can sometimes feel daunting, Weinberg advises, “Retirement plans don’t have to be complicated, they just have to work.”

No one knows precisely how long their retirement plan will need to work for, but if the longevity trend continues, the number of years Americans will spend in retirement will only continue to grow. With smart, simple planning it’s possible to ensure maximum enjoyment and peace of mind throughout retirement no matter how long it will be. Live on!

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Company Name: Whole Life Capital
Contact Person: Richard Weinberg
Phone: 732-945-5192
Country: United States