With the expanded time frame, the aging population will need to adjust their long-term financial plans accordingly so it can continue to fund housing and health care costs.The increase is attributed to longer life expectancy along with some seniors’ decision to enter retirement in their early 60s.
“Now we have more of a 30-year retirement period we are looking at,” said Shawn Britt of Nationwide. “People are living longer and there was a time that we projected a 20-year retirement period where people would retire at 65, the husband would die by 85. Most Americans are now retiring at 62.”
The 30-year retirement period shows a sizable increase from the U.S. Census Bureau’s 2000 average retirement period of 18.7 years.
Because of the rise in number of years spent in retirement could also mean an increase in the amount of costs seniors acquire, it is important for those in the industry to plan for this new, longer retirement.
“As people age into their 80s, it increases the amount of money they need to survive,” said Britt. “This isn’t something people are aware of. The aging of America really has an impact on how we have to plan.”
Today, when couples reach age 65, there is a 50% chance one spouse will live to age 92 and a 25% chance one spouse will live to age 97, Britt says, citing research from Senior Capital Services.
While life expectancy for both men and women has increased, women have a longer life expectancy than men, and should be realize they will most likely face greater costs than their husband, according to Britt.
It’s important that people understand what they’re really facing. They need to understand that women are going to live longer than men, and their health care costs will be more.
I agree with what Britt has said that “As people age into their 80s, it increases the amount of money they need to survive." Health declines as people grow much older, they become more vulnerable to life-threatening diseases and thus they have a big chance of moving to facilities or receiving care at home. But you need to understand that it can be very expensive to move to facilities like nursing homes and assisted living facilities. It's much cheaper to receive care at home but if you haven't saved enough money then this will become a big problem for you. What people should do is research about long term care insurance premiums and benefits and apply as early as possible. This is the best way to avoid expensive long term care expenses in the future and also to protect your assets. Without coverage like this I doubt if you can outlive your money.
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