As more people reach the ripe age of 100, longer retirements become the norm and financial plans need thoughtful revisions. Continuous advancements in medicine and healthcare, along with healthier lifestyles and biotech innovations, contribute to the quadrupling of American centenarians within the coming three decades. Pew Research Center projections indicate that 422,000 individuals will be living past 100 years by 2054, increasing from approximately 101,000 in 2024.
Living to 100 is becoming less of a rarity, according to Joe Petry, a certified financial planner and the founder of Mayfair Financial. The increase in centenarians means retirements could span three to four decades, effectively a second adulthood, but without the constraints of daily work commitments.
While one cannot precisely predict if they will live to the age of 100, it's crucial to be financially prepared. Longer lifespans necessitate larger retirement savings. A recent study by insurance provider, Nationwide, found that healthier and wealthier retirees are more likely to live to older ages. According to the study, healthy couples have a 20% likelihood of having one partner live past 100.
For healthy individuals with no known health threats, extending their working years beyond the average retirement age could boost retirement savings. It's worth contemplating deferring Social Security to maximize future benefits. Petry suggests that delaying benefits past the full retirement age up to 70 results in an approximate 8% income growth-acting much like a guaranteed, inflation-adjusted pay raise for your future self.
With longer lives come new financial strategies, such as converting traditional IRA and 401(k) accounts to a Roth IRA, enabling tax-free growth. Byrke Sestok, a Certified Financial Planner and adviser at Moneco Advisors, underlines the importance of strategically handling retirement savings and incorporating elements like Medicare premium brackets planning.
Health considerations and the possibility of needing assistance in daily living tasks or medical appointments should be factored into retirement planning. Long-term care insurance can facilitate this, offering a safety net for costs associated with in-home assistance and other care services.
Good health habits-proper nutrition, regular exercise, and community engagement-are key to aging well. Cultivating hobbies such as travel or music can also contribute to a joyful and fulfilling retirement.
So, if you're expecting to experience a lengthy retirement, a thorough check on your financial health is prudent. Postponing retirement, delaying Social Security benefits, and strategic financial planning can help ensure monetary stability during retirement. Alongside meticulous planning, maintaining good health and staying connected to the community are essential in making the most of your retirement years.