Will Your Retirement Outlast Your Savings?

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Will you avoid this neglected retirement risk?
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Hi, let’s take a minute to talk about one of the biggest risks in retirement that’s well studied, well known, yet rarely discussed. That risk is longevity, the risk that you’re going to outlive your money or purchasing power, which we can talk about after. But I was doing some research this weekend and reviewing the 2024 numbers and statistics as they’re related to retirement. I wanted to share some slides with you. So, today’s age, if you’re 65, there’s some high probabilities. If you’re a healthy couple, non-smoking, there’s a 90% chance that one of you is going to live to 85, a 73% chance that one of you is going to live to 90, and almost a 50% chance that one of you is going to see 95. So, if you’re retiring at 65, you need 30 years of retirement income, dignity expenses, medical expenses, and etc. And on top of that, you need 30 years to keep up with the pace of inflation.

I find that a lot of people I talk to always think that they’re going to pass on a lot sooner than they do, and it’s tough to see people either not save up enough money or spend through their assets just because they don’t think they’re going to live that long and then end up living dependent on others and struggling in their last years of life. So, we take that and let’s go to another slide here.

Now, you couple that with how long people are living, and let’s look at people who expect to work beyond 65. So, 68% of workers who expected to work past 65, only about 31% actually continued to work. Now, that’s a big swing, and look, if you come over here and look at the reasons for retiring earlier than planned, 35% is from healthcare, 31% is from changing a downsizing a company. So, right off the bat, almost 2/3 of your opportunity to work longer are not even in your control. So, there’s a 66% chance that either you’re going to have a health issue or there’s changes at a company, downsizing completely out of your control. And if you find yourself in a position like that at 65, the reality is it’s going to be tough to find new sources of income. And then you go down the list, care for a spouse or family member, outdated skills, or other work-related reasons. That’s not too many reasons why people stop working. Again, 66% completely out of your control.

Now, we go on in the purple down here; it shows who ended up retiring earlier by choice, and you know, there’s a chunk that says they could afford to, want to do something else, or early retirement package. So, these two slides show a lot of information, both people are living longer, and even though they expect to work longer, they’re not. So, you need to take that into account in your retirement plan. The worst-case scenario, in my opinion, would be that you have more money to retire on than to end up living destitute and relying on others.

So, if you’d like to be confident in a plan to generate lifelong income through retirement and keep you happy and living independent, let’s start with a simple phone call. Reach out to us through our website at bocaretirement.com or send us an email at contact@bocaretirement.com. Thanks!

One last thing, we are also slowly setting up a retirement Mastermind group I am calling Retire Mentality. If you don’t know what a mastermind group is, it’s a group of like-minded individuals getting together to help each other solve common problems. We plan to run this group in a Roundtable format so peers can help each other. We might talk about things like finance, healthcare, travel, and local events. If you are interested in joining this group, you can send me an email at contact@bocaretirement.com. This will be a complete anti-sales group designed purely and helping you help others retire successfully.

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