Planning for Longevity in Retirement
Forget the actuarial averages when planning your finances in retirement, says Reuters columnist and Morningstar contributor Mark Miller. With the improved health that so many are enjoying these days, the mortality rates typically used to assess adequacy in an income stream may not be sufficient, with healthy folks likely to live much longer than the averages expressed in statistical charts. For example, it now appears likely that for couples with better-than-average health at age 65, at least one spouse will live to be 100, compared to the statistical averages of 86.6 years for men and 88.8 years for women.
Based on this scenario, it’s clear that longevity needs to be a factor in planning retirement finances. Social Security maximization becomes critical in this exercise, as does careful attention to investment returns and draw-down rates. Miller provides a financial planner’s viewpoint in discussing how those planning for their retirement years need to be advised. Read his article here…