March 27, 2012
What are your odds of reaching age 100? According to the recent SmartMoney article, "Outliving Expectations," by Charles Passy¹, they're probably better than you think.
In the last 60 years, the U.S. has seen a 2,200 percent increase in our number of resident centenarians, and continued advances in medicine will only heighten this trend. In fact, in his article, Passy quotes The Hartford's Chief Medical Strategist, Dr. Robert Pokorski, as saying, "America's population of centenarians is likely to at least double by 2020."
Nonetheless, if stopped on the street, it's unlikely that the average American would cite longevity as one of their top concerns. Everyone wants to live longer, right? But, as Passy's article illustrates, increased longevity creates a new set of challenges for people saving for retirement. And the time to address these challenges is now.
How Much Is Enough?
"At the very least, say pros, plan financially at least through age 95."
"To prepare for four additional years of life span over current projections," writes Passy, "someone who's 50 years old now would need close to $160,000 beyond his or her current retirement savings to maintain a modest lifestyle." That could amount to saving an additional $2,500 a year!
To put this into context, consider the fact that the average 50-year-old today can expect to live to 81. How much money will it take to cover those 31 years of living expenses? Passy says that experts put their estimate at more than $1.4M in income and savings. Live another nine years to age 90 and that number becomes $1.75M. And if you're among the growing number of Americans who live to 100, you'll need more than $2M.
How Does Increased Longevity Affect My Investment Strategy?
Here's the good news—you're not in this alone and we're here to help.
It's important to set an investment strategy to help you meet your individual goals. This site is a resource to help you do just that.
Visit "tools and calculators" and try the Retirement Goal Planner to help you determine how much you may need to save today to help meet your needs tomorrow.
The Retirement Savings Estimator is an easy way to help you estimate how much your current retirement savings could be at retirement.
Finally, the eLearning library offers an array of articles and presentations to help you better prepare for your retirement.
Talk to your financial advisor today to find out what products and features may be right for you.
Despite Challenges, This Is Great News!
At the end of the day, increased longevity allows us to spend more time with loved ones and live life to its fullest. The Hartford wants to encourage you to think about the financial impact of those additional years and prepare yourself accordingly.
Be well and live well.
About Robert Pokorski, MD
In 2010, Dr. Robert Pokorski became the first Chief Medical Strategist in The Hartford's 200-year history, as testament to our commitment to helping financial advisors, their clients and consumers better understand how increased longevity affects retirement planning. He has published more than 130 articles in such prestigious publications as Nature, Cancer, and The American Journal of Human Genetics; and delivered more than 450 longevity-related presentations to audiences worldwide.
Dr. Pokorski is certified by the Board of Insurance Medicine and American Board of Internal Medicine, and is a fellow of the American College of Physicians. He holds an MBA from Heriot-Watt University in Edinburgh, Scotland, and a doctorate of medicine from Creighton University School of Medicine in Omaha, Nebraska.