Will Living Longer Impact Your Retirement Years?

Will Living Longer Impact Your Retirement Years?

“Will living longer impact my retirement years?”  It’s a common question that we hear often from investors.  

Longevity can be a blessing if you enjoy a healthy lifestyle that includes physical activity and financial freedom. However, living longer may be a potential curse if you suffer from a debilitating long-term illness or run out of money when you need it the most, later in life.

Being financially secure during your retirement years can impact both your physical and financial well-being for both you as well as your spouse. 

Notwithstanding the impact of pandemics, our life spans will continue to get longer due to enhancements in medical science and available drugs people take for heart and other health conditions. Medical science and the pharmaceutical industry impact your physical well-being. Planning, saving, and investing impact your financial well-being.

In the not-too-distant future, there may be ways to slow down the aging process. This would be the ultimate game changer; healthy aging!  Imagine what our society would look like if a high percentage of the population lived to be past the age of 100.

There is one financial solution for this eventuality – a retirement plan that is based on rising life expectancy and adequate retirement savings to pursue financial freedom. 

At ViaWealth, we specialize in helping high-net-worth individuals and families with long-term retirement planning.

In this article we’ll cover the following longevity topics:

  • How does longevity impact your working years?
  • How does longevity impact your retirement years?
  • How does longevity impact you late in life?
  • How does longevity impact your children?

How does living longer impact your working years?

When you think about your current financial situation, there should be four primary planning components that a financial advisor can assist you with creating:

  • A financial plan during your working years
  • A savings plan for accumulating assets
  • A retirement plan for the extended life spans of both spouses
  • An investment plan for protecting as well as growing your wealth

This makes the financial advisory firm you select to help you manage your wealth management efforts that much more important during your working years. They need the skills, expertise, and services to provide you with the correct form of financial advice that helps you navigate through all phases of your life.   For example, you want to be sure you work for a company that sponsors a 401k plan with matching employer contributions.

One example of how a financial planner can help devise a plan during your working years is an assessment of your 401k plan.  A CERTIFIED FINANCIAL PLANNER(R) can look at how much you are contributing to the 401k plan, along with any matching employer contributions, to maximize your retirement savings efforts. 

Also, be sure to maximize your contributions to any IRAs you have, due to their tax benefits. Contributions to personal savings accounts are last due to potential taxes on realized gains, dividends, and interest.

The investment advisors at VIA Wealth can help you develop a plan and accumulate more assets for your retirement years.

If you have 12 years or more until you hit retirement age, don’t assume Social Security benefits will be there in their current form when you’re ready to retire. This benefit could be bankrupt by 2035, so there is a good chance the government will change the retirement age rules before this happens.

Another consideration during your working years is funding a Long Term Care policy for you and your spouse. This will help defray some of the expenses if you and/or your spouse have to spend prolonged periods of time in assisted living, skilled nursing, or memory care.

How does living longer impact your retirement years?

Now that people are living longer and are aging healthier, there is no longer one retirement strategy that fits everyone. There may be three phases to your retirement planning efforts: early, mid, and late. The early retirement years may include a lot of travel while you are healthy enough to enjoy it. The mid-years may include more time with family and the late years may become more sedentary.

The ViaWealth team of CFP(R) professionals can help you plan for your retirement years and invest your assets as you pursue your financial goals.

Longevity will more than likely impact your retirement plans. For example, you may not like the idea of being retired for 30, 40, or more years. Perhaps there is a transitional part-time job that you can do from home that transitions you into full-time retirement over time. This activity may produce enough income to reduce the drain on your retirement savings or even enable you to continue saving for a few more years.

Based on health, this may be your opportunity to pursue an activity you have always wanted to do more of (travel, family, golf), but never had the free time for.

A CFP(R) professional can assist you with estate planning to ensure your assets under management are protected with appropriate diversification and risk management.  A financial planner can also help to update your estate plan on a regular basis, especially as life events occur to you and/or your spouse or family.

How does living longer impact you late in life?

These can be the tougher years that no one wants to think about. But, all of the planning and retirement saving in earlier years can make these years a lot more pleasant for both spouses. For example, you both move into an assisted living facility that is the equivalent of a luxury resort with numerous activities that you enjoy.

To experience financial freedom late in life will take some serious financial and retirement planning that maximizes your quality of life. 

What does living longer mean for your children?

Longevity could have a big impact on your children if you and your spouse failed to plan and save properly for retirement. This is particularly true when there is one surviving spouse who cannot afford to live on their own or is unable to live on his or her own.

No parent wants to be a financial burden on their children. In particular late in life when they may require more attention and care. 

Once again, the solution is a smart retirement plan and adequate savings so parents never become dependent on their children during their late retirement years.

Planning, saving, and investing are the three keys to a successful retirement during a period of rising longevity. VIA Wealth can help you make the right decisions.

ViaWealth, LLC is a Registered Investment Adviser. Information in this article is for educational purposes only and is not intended to be an offer or solicitation for the sale or purchase of any specific securities or other types of investments. Investing in the securities markets involve risk of principal and unless otherwise stated, returns are not guaranteed. Be sure to consult with a qualified financial adviser and/or tax professional before making any financial decisions. Past performance is not indicative of future performance.

More about the author: Lance Larson

Lance is the Managing Member and Founder of ViaWealth LLC.

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