Life expectancies are on the rise. While that’s good news for those of us that have big plans for our later years, it may not be the most promising development for our financial plans.
According to a 2011 survey, a substantial number of folks in both groups underestimated how long they might live by at least five years. The Society of Actuaries surveyed retirees and pre-retirees ranging in age from 45 to 80.
The Centers for Disease Control in 1950 estimated that the average newborn baby could expect to live to the ripe old age of 68.2 years.
Fast forward to the year 2000, and that number crept up to 76.8 years. And it’s still rising.
The Social Security Administration’s life expectancy calculator estimates that the average man turning 65 will live to reach the age of 84.3, while the average woman in the same boat will make it to see 86.6 candles on her birthday cake.
To further drive that point home, the SSA notes that these are just estimates. One in four will live as long as 90 years, while one in 10 will make it past the age of 95.
From a bottom line perspective, it may be time to take a look at your overall financial plan to see if it will stand the test of time.
Carolyn McClanahan, a medical doctor and the co-founder of Whealthcare Planning, helps folks plan out the finances of aging.
As she sees it, it’s time for people to come to terms with the fact that they’re going to be living longer, and they need to adjust their strategies accordingly.
“I’ve been on this agenda for a number of years now, that we need to quit talking about retirement planning and start talking about planning for when you can no longer work. Retirement was not intended to last for 30 or 40 years,” she told CNBC.
“Every year you work is more financial security.”
Of course, individual circumstances will vary. Some folks are well-positioned to retire when they see fit, while others may need to honestly assess how financially prudent it will be for them to retire at a certain age.
There is no one-size-fits-all age when it comes to retirement anymore, but the Motley Fool offers up three simple rules that can help you narrow things down: Retire only once you’ve saved enough, Do what makes sense for your health, and Don’t go in blindly.
That’s some solid advice that can certainly help as you examine the state of your own financial plan.
As always, getting ahead of the curve before it’s too late can save you a ton of heartache down the road. We can all plan ahead, but it remains pretty tough to go backwards and get that ever elusive do-over.