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The Calamity Of So Long Life: How Not To Outlive Your Assets

Saturday, April 20, 2013 - 10:53 AM
From Bloomberg:
Granted, retirement planning is challenging for both genders. In a survey conducted by the Society of Actuaries, less than 20 percent of men and women say their planning horizon is at least 20 years. Thing is, the repercussions of not properly planning for a long retirement are higher for women, who face strong odds their retirement will be far longer than that.

Average life expectancy at age 65 is 20 years for women, compared with 17 for men. That means there is a 50 percent chance a woman age 65 today will still be alive at age 85. And that's just if you're average. Nearly one-third of women age 65 today will celebrate their 90th birthdays.

“What often isn’t understood is the variability,” says Cynthia Levering, a retired pension actuary who continues to work with the Society of Actuaries. “You really need to plan around what happens if you are healthier and fall into above average.” To wit, a 65-year-old woman who lands in the top quartile in terms of longevity has a 62 percent chance of making it to (at least) 85 and a 42 percent chance of getting to 90. (For men in good health, the odds shift to 50-50 of being alive at 85 and 30 percent for age 90.) 

Joe Tomlinson, an actuary and financial planner in Greenville, Maine, says those not-so-long odds of a long life is why he typically builds retirement plans around a 95-year life span. “This is one assumption you don’t want to underestimate,” he says.
 

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6
pearlbrownpearlbrown1,430 posts since
Nov 2, 2010
Rep Points: 6,246
1. Saturday, April 20, 2013 - 7:20 PM
Isn't it sad that we have to think about "outliving our assets" when we should just be focused on just "living" as long as we can to help those who need us.   If someone I love needs my help, I am sure not going to worry about whether helping them will shorten how long my assets will last.  What if I don't help them survive their life and then I konk off early but I got to do it while I still had plenty of assets left.  What a joy!  I am just trying to make a point here.
2
paoli2paoli21,365 posts since
Aug 10, 2011
Rep Points: 5,982
2. Saturday, April 20, 2013 - 7:25 PM
Here's a watershed: Baby boomers are expected to have a lifestyle in retirement that's not as good as their parents' golden years.  That reverses more than a half century of American progress.

Many boomers face grim retirement- MSN Money
2
ShorebreakShorebreak2,602 posts since
Apr 6, 2010
Rep Points: 14,080
3. Saturday, April 20, 2013 - 7:44 PM
Excuse me Shorebreak but I don't think I am a baby boomer and what happened to "my" golden age?  It's not just the baby boomers who are going to have it tough but I think a lot of their parents are using their golden age funds to just help their "boomers" to even get to their older years.  Just how much do you think our adult children can save when CDs are blessing us with .50% interest for 5 years!  What incentive does our glorious government give them to even try to save?    We need to take a hint.  Savers have been fed to the whales and any "golden" years are long gone no matter what age we are.  
1
paoli2paoli21,365 posts since
Aug 10, 2011
Rep Points: 5,982
4. Saturday, April 20, 2013 - 8:16 PM
Re: paoli2 @ 3. Saturday, April 20, 2013 - 7:44 PM

You are excused for not realizing "Baby Boomers" are individuals born between 1946 and 1955. Regardless, "According to the Employee Benefit Research Institute, only 22% of workers 55 or older have $250,000 saved for retirement. What's more, 60% of that same age group has less than $100,000 socked away. Clearly not enough to retire."
1
ShorebreakShorebreak2,602 posts since
Apr 6, 2010
Rep Points: 14,080
5. Saturday, April 20, 2013 - 8:52 PM
Shorebreak, sorry to correct you I think the keyboard got away from you.  According to the Census Bureau, A baby boomer is a person who was born during the demographic post-World War II baby boom between the years 1946 and 1964 (not 1955). 
3
pearlbrownpearlbrown1,430 posts since
Nov 2, 2010
Rep Points: 6,246
6. Saturday, April 20, 2013 - 9:15 PM
Well I was "almost" a Baby Boomer.  Just missed it by a few years according to Pearl. 

Shorebreak:  You are excused for not getting the dates correct (which is very unusual for you). 

BTW, what are the kids called who were born after 1964?  Anyone know?  Thanks.
2
paoli2paoli21,365 posts since
Aug 10, 2011
Rep Points: 5,982
7. Sunday, April 21, 2013 - 6:37 PM
Sorry for my error about the dates. Thanks for pearlbrown for the correction. The remainder of my post @ 4. Saturday, April 20, 2013 - 8:16 PM remains valid. Cheers.
2
ShorebreakShorebreak2,602 posts since
Apr 6, 2010
Rep Points: 14,080
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