What If You Live a Really Long Time?

My oldest client just passed away.  She was a delightful person who loved to talk about her family and how proud she was of them.  She lived by herself in her own home until just a year or two ago, then moved into an assisted living facility for her final years.  She was 102.  Her story is the same as my grandmother’s, who passed away in 2011, also at 102, having remained active up to the very end.  Both of these extraordinary ladies lived long, healthy, and productive lives.  Each lived in an assisted living facility at the end and had an estate that was able to provide for her needs without becoming a financial burden on family.

Will you be able to financially take care of yourself until you are 102?

We’re talking about a retirement that might be as long as 40 years!  When you add up all of your investments, real estate, bank accounts, etc. will they provide enough for you to live for several decades and will there be enough left to pay for some additional help in your final years?  If the possibility of living a long time in retirement is worrying you, here are some steps you can take:

  1. Work longer.  It’s becoming much more common for people to work to an older age – either by continuing to work at their same job or to retire from their “career job” but continue to work at something they consider less strenuous, more in line with their personal interests or hobbies, or something that lets them work part time.

  2. Make sure you don’t have debt in retirement.  The fewer things you have to pay for in retirement, the better.  This might mean you have to downsize your house, the cars you drive, or perhaps reduce the amount of “stuff” you have.

  3. Make a retirement budget.  Don’t retire until you have some idea of what your monthly expenses will be.  It is common to spend more in the early years of retirement than you will later on, but take some time figuring those out in advance.  The start of retirement is not the best time for an unpleasant surprise.

  4. Consider making some of your savings a pension.  There are ways to guarantee an income that will last as long as you do.  You might want to consider tallying up what your expenses will be, then matching them up to social security, pensions, and other fixed income sources.  That will mean your other money can stay invested and be used more flexibly.

  5. Involve the family – Make sure your family knows what your retirement plans are.  They might be able to help.  You don’t have to divulge every detail about your finances if you aren’t comfortable doing so, but it will help you to share your retirement plans with your family and it will help them to find ways to help you. 

If you would like to talk further about this or other topics, feel free to email me at gedwards@cfnmail.com.  You are also welcome to suggest other topics for future blogs!