One of the confusing things about planning for retirement is trying to figure out how long it will last. It's as if I was crouched at the start of a race without any idea how long the race will be. If it's going to be short, maybe I should sprint for it and not worry too much about running out of energy. But if it's going to be a marathon I'll want to nurse my resources and watch them carefully so I don't run out too soon. But getting some idea how long the race will be means figuring out my life expectancy.
- At least one new roof, perhaps two.
Doing the retirement-savings math can be a little scary. Or maybe a lot.
At age 65, statistically speaking, you can expect to live another 18 to 20 years. Of course, you could be around a lot longer than that, so to be on the safe side financial advisers suggest you plan for retirement with the idea of living to 95 or 100.
I can start collecting Social Security Benefits any time from age 62 to 70. The earlier I take them, the less my benefit will be, so there is some strategy to deciding when to pull the trigger. I want to figure out the ideal time to do it, and I'm also curious how much money I would have had to save up to provide the same stream of income that Social Security will provide. So I did a little calculating to see how much difference it makes.
Financial planning to age 120: Society of Actuaries says Americans need to plan for living longer. The Society of Actuaries found that more than half of Americans underestimate their life expectancy, and that their financial planning time horizons are too short. Once folks get the notion that half of people will outlive the average life expectancy of their age group they need to revisit their financial planning time horizon. The Society found that retirees’ horizons are not long enough for adequate retirement planning.