President Perceptive Business Solutions Inc.
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How Long Do Retirement Assets Need to Last?

Talking about a client’s death is not a subject you usually contemplate, but an easy exercise for yourself and your client who is wondering how long their retirement assets need to last. The results are surprising.

Nov 12th 2019
President Perceptive Business Solutions Inc.
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As reported in July 2019 by CNBC, The Center for Disease Control estimates, a baby born today will live 78.6 years. These are aggregate numbers as women tend to live longer than men, but a lot depends on where you live and your access to quality medical care.

So, say your 75-year old client who has finally decided to sell their business isn’t feeling great about paying for your retirement planning advisory services. Let’s dig deeper.

Life expectancy also varies by current age. The CDC’s 2017 National Vital Statistics Report paints a better picture:

Current Age Life Expectancy Current Age Life Expectancy
       45           80.1         75             87.3
       50           81.6         80             89.2
       55           82.4         85             91.6
       60           83.3         90             94.5
       65           84.4         95             98.1
       70           85.7       100           102.2

Lifestyle Matters

At this point your 75-year-old business owner is not bolting from her chair anymore. Now we are talking about 87.3 years. Because she’s a woman, that might bump up to 88.0 years. Now you introduce another question, “Do you take care of yourself?”

Let’s consider our 75-year-old female business owner as an example. If she’s the average height of 5’ 4” and 120 pounds, she’s starting off at an estimated life span of 83 years. 

She will gain or lose points for the following categories:

  • Family history of heart disease
  • Blood pressure
  • Reaction to stress
  • Exercise
  • Dietary habits
  • Seatbelt use
  • Driving record
  • Alcohol consumption
  • Tobacco use
  • Use of illegal drugs
  • Frequency of doctor checkups

Your 75-year-old female business owner who exercises and lives a clean, healthy life might live to be 100. On the other hand, your 75-year-old female who is a hard drinking overweight smoker and recreational drug user might have been expected to die ten years ago! That’s where factors like seatbelt use and driving record are a contributing factor. If heart disease didn’t get them, they might have gotten into a serious traffic accident.

What’s the Bottom Line for Retirement Planning?

There are several takeaways. Clients in their 50’s to 70’s can reasonably expect to live into their 80’s. Women traditionally live longer than men. Lifestyle matters. Living an enjoyable life within reason can bring your life expectancy into your 90’s. Taking risks shortens it considerably.

Assuming your client is thinking about retiring at age 65, they should plan on funding at least 20 years of retirement.

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