As you plan for retirement, it’s essential to keep an eye on your savings rate and total nest egg. However, determining how much you need to have set aside depends on one crucial number — your life expectancy. But here’s the catch, no one knows exactly how long they will live.
At Extreme Investor Network, we understand the importance of longevity planning when it comes to retirement. That’s why we emphasize the significance of considering longevity risk, which measures the likelihood of outliving your savings. Planning to only live until the average life expectancy can be a risky move. Lisa Schilling, the director of practice research at the Society of Actuaries Research Institute, warns that there’s a good chance you may need your money to last longer than the anticipated age.
To address this uncertainty, the Society of Actuaries and American Academy of Actuaries offer a free online longevity illustrator. This tool provides personalized estimates based on factors like age, gender, health status, and retirement age. By understanding the range of possibilities for your life expectancy, you can tailor your financial plan accordingly.
Understanding how chronic health conditions affect life expectancy projections is also crucial. Conditions like high blood pressure, cardiovascular disease, and obesity can significantly impact how long you may live. Personalizing your financial plan based on your specific health status can help you make informed decisions about retirement funding needs and asset allocation.
At Extreme Investor Network, we believe that personalized numbers and tailored financial plans are key to a successful retirement strategy. By considering your individual circumstances and potential health issues, you can better prepare for the uncertainties that come with planning for retirement. Don’t just rely on generic assumptions — take control of your financial future with personalized longevity planning.