As the average lifespan continues to rise, Americans must plan for longer retirements
Americans are living longer than ever before. A child born in the US today can expect to live about 79 years, according to the Centers for Disease Control and Prevention. That's more than two years longer than the life expectancy for someone born in the US in 2000. Go back further and the rise is even more dramatic: Life expectancy for those born in 1960 was about 70, while for those born in 1930 it was about 60.
The role of medical advances
The continued increase in life expectancy results from a complex combination of factors. Improved health care has played a major role, especially due to medical advances in treating heart disease and cancer, which have caused death rates to fall since 1999. Preventive health care measures such as lowering blood pressure and cholesterol, quitting smoking and screening for certain kinds of cancer have also helped, as has increased awareness of the benefits of eating healthy and exercising.
Men, women and longevity
Women can expect to live longer than men—81 years versus 76. What’s more, life expectancy increases as one ages. For instance, a 65-year-old man can expect to live until 84, on average, while a 65-year-old woman can expect to live until 87. For 88-year-old men and women, respectively, those figures rise to 93 and 94.
For couples, the life expectancy of one partner is much higher than for either individual. There is a one in four chance that one partner in a 65-year-old couple will live to 98, and a one in two chance that one partner in a 30-year-old couple will live to 100.
Implications for advisors
The continued increase in average lifespan has profound implications for retirement planning, no matter one's age or marital status. Not only will people have to plan for longer retirements, they will have to set aside more for health care, which becomes a larger portion of expenses the older a person gets. Advisors should work with clients as necessary to shift retirement expectations. With sound financial strategies in place, many people can make their money last as long as they do.
