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  • Eric Walter, CFP®

Financial Planning Corner: But I Won’t Live that Long…


The average U.S. life expectancy is now around 80 years. We hear this statistic all the time, but this references someone born today, not those who are already decades into their lives. A male currently in his mid-60s has a 40% chance of living to 85 and an almost 20% chance to make it to 90. A female in her mid-60s has a greater than 50% chance of living to 85, a 30% chance to reach 90, and a 20% chance of living to 95. These are not just statistics to us but something we see every day. When our firm started 15 years ago, we had no clients over the age of 85 and only a few in their 80s. Today, we have two clients who are already over 100, a handful in their 90s, and several more who will be 90 within a year. This potential longevity can put a lot of pressure on your assets and warrants planning to ensure they last.


In fact, if there are no known health issues or a family medical history that informs otherwise, we now run all client financial plans to age 100. Our clients often say- ‘I won’t live that long’ or ‘I won’t make it past age X’ but some will. We are seeing it more and more often, and since we don’t specifically know who will live this long, the prudent thing to do is ensure there is a plan for those who do.


Longevity risk is compounded further by the number one wealth destroyer - a long-term illness. As we live longer, we are not necessarily living healthier, which creates an increased risk for physical and cognitive declines that may lead to a need for care. In fact, 70% of those age 65 or older will need some level of care in their lives. While the average care need is around three years, over 20% of those needing care will need five or more years.


Costs for care continue to rise, as well. Most people want to stay in their homes, and for them, round-the-clock care costs around $250,000 per year on average. Annually, both private and semi-private nursing home rooms now average over $100,000, and assisted living facilities $60,000 per year. With the last Baby Boomers turning 65 in 2029, these costs will continue to increase significantly as the need for care grows over the next few decades.


All of this speaks to the importance of doing everything we can, in the areas we can control, to be as healthy as possible for as long as possible. While exercise, diet, and environmental factors all come into play, one area that is often overlooked is the health of your relationships. The Harvard Study of Adult Development, one of the most extensive studies ever done, found that having close relationships is the best predictor of longevity and helps delay mental and physical decline. Whether it is your spouse, other family, or a vibrant social scene, we encourage you to stay engaged and continue building positive, meaningful relationships as long as you are able.


We are here to ensure you have a plan for longevity and guide you through the many things that can happen along the way. Let us know if you would like to get started on your financial plan or make a change to your existing plan.

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