According to Social Security, the average life expectancy for a male or female having reached the age of sixty-two is 83% and 85% respectively. According to Actuarial Consultants, Inc., sixty-five year olds have greater than a 50% chance of living beyond age 87 and if that same person isn’t taking medications at age 65, they have a 65% chance of living into their 90s!! Life expectancy isn’t an estimate of how long you are going to stay alive; it simply represents the average number of years a person is expected to live. Many are going to live longer. This blessing (or risk) affects retirement planning. It dictates how much money we need to last us through our lifetime. Inflation strikes retirees harder than pre-retirees. People aged 65 to 74 appear to experience an inflation rate that is 1.11 percentage points a year higher than CPI climbing after that! The take away is this: longevity demands growth in our portfolio. In summary, planning for one’s retirement years requires attention and diligence surrounding our investment strategy.
Financial Planning May 2012, Bureau of Labor Statistics 2011
