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Living Longer Than Expected & Financially Planning For It

KaitlynSchlicht Blogger

 

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You’ve probably heard it before. People are living longer! The average life expectancy has been increasing one year every five years, according to World Economic Forum. Kids born in 2017 can realistically expect to live to 100. But what does the probability of increased longevity mean for your wealth and health? 

 

Look into the numbers

 

It’s easy to get excited about all the possibilities of living a longer, fuller life. However, more time on earth means possibly working longer and increasing your necessary savings. Here are some recent statistics to keep in mind:

 

Obviously, it’s important to prepare for retirement before the time comes. Also, remember that these numbers are just averages. Where you live, your hobbies, your health, and your desired retirement lifestyle are also factors that need to be considered.

 

For example, if you’re a minimalist in good health and want to downsize when you retire, your average cost of retirement could be lower than the national average. On the other hand, if you plan on traveling abroad, choose to continue unhealthy habits such as smoking, and are accustomed to a higher standard of living than your peers, the number could be higher.

 

Then again, it’s also important to plan for life’s unknowns. Some people unexpectedly live beyond 100 or become diagnosed with an undesirable health issue. 

 

So how do you prepare for living longer and the financial variables associated with it?

 

Seek guidance and financial knowledge

 

The most important thing you can do is talk to a financial professional. He or she will be able to evaluate your current investment strategy and offer comprehensive guidance to retirement planning.

 

Here are some other general tips and guidelines to broaden your financial knowledge around retirement preparation:

 

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  • To build a foundation of income in retirement, financial professionals recommend saving 10% to 15% of your annual salary.
  • Be mindful of your own life expectancy, not just the average. Analyze your own personal factors, such as age, gender, and medical history. The Actuaries Longevity Illustrator is an online calculator and excellent resource for soon-to-be retirees.
  • Create a monthly budget for each year you plan to be retired. Budget all of your estimated expenses – medical, dental, housing, food, etc., against your estimated income from Social Security, pensions, savings, etc. Wondering how Social Security has changed in 2017?  Transamerica has you covered. Also, consider how your expenses change when you retire. For example, perhaps you’ll save money by ditching your car and taking public transportation. Evaluate how healthy you’ll be at the different stages of your life. You might want to plan to save a little more for family trips soon after retirement since you’ll have more energy while shifting those dollars towards medical expenses in your later retirement years. 

 

Conclusion

 

With an increase in life expectancy, preparing earlier for retirement is worth considering. Take the time to map out how you’ll want to live in future years, set up a meeting with your financial professional to see how you can get the most out of your investments, and stay tuned to Transamerica’s Knowledge Place to keep up with financial trends in retirement.

 

Neither Transamerica nor its agents or representatives may provide tax, investment or legal advice.  Anyone to whom this material is promoted, marketed, or recommended should consult with and rely on their own independent tax and legal advisors and financial professional regarding their particular situation and the concepts presented herein.

 

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This material was prepared for general distribution.  It is being provided for informational purposes only and should not be viewed as an investment recommendation.  If you need advice regarding your particular investment needs, contact a financial professional.

Insurance products and services are offered or issued by Transamerica Life Insurance Company, Cedar Rapids, IA; Transamerica Financial Life Insurance Company, Harrison, NY (licensed in New York); Transamerica Advisors Life Insurance Company, Little Rock, AR; Transamerica Premier Life Insurance Company, Cedar Rapids, IA; and Transamerica Casualty Insurance Company, Columbus, OH. Variable products and mutual funds are underwritten and distributed by Transamerica Capital, Inc., or Transamerica Investors Securities Corporation, each a broker/dealer and member of FINRA. Securities and investment advisory services offered by Transamerica Financial Advisors, Inc., a broker/dealer, member of FINRA, SIPC and a Registered Investment Adviser. Investment advisory services focused on the unique needs of individual retirees, retirement plans and their participants offered by Transamerica Retirement Advisors, LLC, a Registered Investment Adviser. References to Transamerica on this site apply to an individual company or collectively to these and other Transamerica companies. This site may not yet be approved by the Departments of Insurance in all states at the time of publication. Transamerica companies are part of the Aegon Group. Copyright 2011 - 2017 Transamerica Corporation, 4333 Edgewood Road NE, Cedar Rapids, IA 52499 - All Rights Reserved. Transamerica does not sponsor, endorse or promote any products or services mentioned

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