Hope for your financial life and beyond

Are You Ready to Live to 100?

100This coming February, 2014, our family will be gathering in central Indiana to celebrate a centenarian life. My grandfather will be turning 100 and I’m sure there will be a festive party at the retirement community where he lives. What makes this even more remarkable is that he will be the second member of his family to reach this age. His sister is still alive and kicking at 102.

Both are generally healthy for their age and maintain an active lifestyle (as much as possible for a 100-yr. old). My grandfather, a preacher all his life, still helps lead church services for the other retirees and is an active writer in his journals. His sister still enjoys playing pool in the rec-hall basement. They both tune in every day to watch the Chicago Cubs play and then rehash the game with one another.

While living to 100 is still not the norm, their longevity represents a growing trend in the U.S. and the rest of the world. People are staying healthier and living longer. In fact, the Population Division of the United Nations estimated in 2012 there were 316,000 centenarians worldwide, with the U.S., Japan and China leading the way with the most.

This becomes even more pronounced when it is compared to statistics from the 1930s, the decade Social Security Act was passed into law.

In that decade, the average life expectancy (from birth) was 58 for men and 62 for women according to the Social Security website. Interestingly enough, the retirement age was 65. So neither gender was expected to make it to retirement age when they could start receiving benefits, although many obviously did. Today however, if a man or woman reaches the age of 65, they can expect to live another 15-20 years respectively.

With the increase in life expectancy one would think that people are also planning better to cover the financial costs of these extra years of living. Sadly, that does not seem to be the case. According to a recent study entitled “The Retirement Savings Crisis: Is it Worse Than We Think?” from the Washington, D.C.-based National Institute on Retirement Security, the average American has little savings. Those that are 10 years away from retirement have a median retirement savings of $12,000. Of those between the ages of 55-64, one-third has not saved a thing for retirement.

Those are amazingly unfortunate statistics.

So what can people do to be better prepared?

For starters, people need to develop a culture of saving, as opposed to spending. By and large, people are focused on immediate needs. They fail to delay gratification and recognize how their day-to-day decisions will impact them 20 or 30 years from now. Overspending in the present will cripple your financial future.

Secondly, there needs to be a focus on lowering debt levels. Income is generally reduced during the retirement years so there will be less financial resources to go around. It’s therefore imperative to eliminate whatever debt possible pre-retirement. This will allow retirees to use their money for other necessities such as adequate housing and health care.

In addition, if projections indicate you will not meet your retirement goals by the designated retirement age, you may have to consider working longer, perhaps into your early 70s. The extra income generated in those years could provide the cushion of support you need.

Finally, do the proper things now to maintain a healthy lifestyle. Health care costs generally increase into the retirement years. So whatever can be done in the present to reduce those future costs will be beneficial to one’s financial picture.

Life is lasting longer for our culture as a whole. I’m doing all these things and more to prepare for my retirement. Who knows, maybe I’ll be fortunate enough to get my grandfather’s genes and have a chance to join the centenarian club.

Has anyone in your family reached 100? What stands out about their life – financial or otherwise? What is the biggest thing you are doing today to plan for retirement?

Image at FreeDigitalPhotos.net

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Comments

  1. MoneySmartGuides says:

    This is what makes retirement planning so difficult. How long do you estimate you live for? You don’t want to underestimate it and run out money at 85 only to live like a pauper until 95. I usually take my projections out to age 95. I’m not sure if I’ll get there, but I’d rather be conservative and have money left over than outlive my money.

    • I think that’s wise planning to project until 95. It’s a conservative approach like you said but we have to plan as though we could be blessed to live that long. If there is money left over because we don’t live that long then we’ve also done a good job of blessing the next generation or some charities through our will. Either way it’s a winning scenario.

  2. That’s great your grandfather and his sister are in such good shape! I don’t think anyone in my family has lived that long – my grandma is currently 82 and running circles around us. She’s very active and likes to be out and about most days. You really do need to prepare for many years of living – my parents have retired recently and don’t seem to be thinking about the future too much. They have a small amount invested and are hoping it lasts them. They have social security and my mom’s pension, which gives them a decent monthly income for now. I would be planning for the future, though, just in case – especially since I probably won’t be getting any social security.

    • Seems like maintaining a positive attitude and staying active are the common themes running through the comments here as keys to living longer. Mind and body working together to produce positive results.

  3. Great points to think about. As someone in my mid-20’s, I still think my peers have no clue about their retirement plans and they’re perfectly fine with that. I’m hoping that I can educate them that the sooner they start, the better! Or else, they’ll wake up one day, close to retirement age, and realize that they have nothing saved!

  4. Student Debt Survivor says:

    My great grandmother lived into her 90s and my grandparents are both in their 80s and still physically pretty healthy. It’s pretty scary that people 10 years away from retirement only have $12,000. I think a lot of people think of social security as a retirement fund instead of an anti-poverty measure-as it was intended. Sadly people living on social security alone are likely not living a very good life. I’m sure those folks would tell you they wish they saved more if and when they could.

    • I’m not planning on social security being there for me at all. If it manages to survive in any minute form, it will just be an added bonus to what I’m already doing to prepare myself for that day.

  5. Taynia @ Fiscal Flamingo says:

    No one in my family has lived to see the age of 100. I’m quite certain my husbands parents will make it to that mile marker. They are so active and hold such a zest for life. In fact, they have more energy than my three year old. You know, there is a man at church that sits a few rows ahead of me that just turned 101. More than once I’ve found myself wondering what his retirement finances look like.

    • If that older gentlemen at your church began doing the proper financial things early in his life he is probably well set. The extra 20+ years he has lived past average life expectancy has probably done wonders for his investing portfolio, if he had one.

  6. Kim@Eyesonthedollar says:

    If I can be healthy and have a sound mind, I’d love to live to 100. My Grandma lived to be 91. I think because she never had a bad day in her life. She gave new meaning to making lemonade out of lemons. Everyone else seems to pass in their mid 70’s, so I’m worried about the genetics, but no one really tried to be healthy either (fried foods and lard). I’m hoping I can break the trend.

  7. I knew a couple of my great-grandparents, who both lived into their 90s. The things that stood out about them were actually things that I learned after one or the other passed. Both worked very hard and my great grandfather wrote down EVERY single purchase he made. The funny thing is back then there were far less purchases and life was a lot simpler – at least it sounds like it was.

  8. Holly Johnson says:

    Until earlier this year, I worked at a mortuary where we had part-time employees who were in their 80’s! We also had one guy, Ed, who was 90. Seriously. People are living super long lives these days so you might as well plan for it.

  9. Shannon Ryan says:

    I do believe keeping active and having some purpose makes in a huge difference. It scares me when I see how few people prepare financially for their retirement. I’ve meet people who think they will only live a few years after retirement so between a little savings and social security they will be fine. Then they live another 20 years. Yikes! I hope to live many, many wonderful years past my retirement and that’s what I’m saving for. Plus, if my girls wait as long as we did to have kids (and there is no rush since they are babies themselves right now!!) then I need to live a long life in order to meet my grand babies …. many, many years from now. LOL!

    • I’m preparing for the long haul as well Shannon. There is just a very good chance we will need financial resources to support ourselves for 20+ years after we officially stop working full time. But I’m enjoying my kids too much now…I can’t wrap my head around having grand babies yet 🙂

  10. Wow that’s awesome! What stands out to me is if I’m going to live that long I want to be as active and vibrant as possible. My grandmother lived to be 97, but she was miserable (maybe it was her attitude, or maybe that IS what made her live so long) about 20 years of that time! lol! The statistic does confuse me though. I had also heard a statistic that said children now are not expected to live past the age their parents did (or something like that) because of the obesity epidemic. hmmm.

    • I don’t want to develop a miserable attitude either. Even if we live a long time, life is too short to be negative all the time. That may be true about the obesity issue. It will be interesting to see how the statistics play out over time. It’s definitely an issue people need to be educated on so they can make better choices about diet.

  11. Laurie @thefrugalfarmer says:

    No centenarians in our family, but lots who lived into their 90’s. I totally agree about caring for your health too. I’ve got a friend whose mom is in her 90’s and doesn’t take one prescription drug. She eats well, and walks daily. It’s very cool to see!

    • I think staying active really helps with our energy levels. I notice that on days I run, my energy lasts all day. The other days I’m a little sluggish late at night – like this evening 🙂

  12. Alexa Mason says:

    My great grandmother who passed away a couple years ago made it to 96. She was unlike any other woman I knew. She had her own set of businesses, rental homes and a department store. She worked in the department store up until a month before she passed. She was definitely involved and active. One of the most successful and determine women I’m sure I’ll ever know!

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