Mar 23, 2018 3 min read

A Time magazine study found 77 percent of Americans want to live until 100. More than a third of these people believe they will make it to at least 90.

Only a third of these respondents, however, said they “were happy with their current body weight and their financial situation.” To live a long life, you must be healthy and wealthy enough to accomplish this goal.

These two factors often intersect. Several studies show that a 65-year-old couple will spend $240,000 on health-care expenses, including insurance premiums and out-of-pocket expenses. This total does not include the long-term care expenses if either partner would require a nursing home.

Modern medicine has made living longer possible. We also benefit from a healthier environment and can make improved lifestyle choices. We know that exercising, reducing stress, maintaining a healthy weight and not smoking can have major benefits.

Living longer requires more savings. Inflation in a 30-year retirement can be very costly. As we age, our health-care expenses increase much faster than overall inflation. We also may need to modify our homes to accommodate physical challenges.

A recent Google consumer survey found 33 percent of Americans have no retirement savings. Another 23 percent have saved less than $10,000. These figures are clearly not adequate savings.

As we age, people should become more conservative with investments. There is a general guideline known as the Rule of 100, in which you take 100 minus your age. This gives you an idea of what percentage of your investable assets should be in the stock market. While this rule is not perfect, it does provide a useful guideline.

You must be more conservative because you do not have time to make up losses. If the market suffers a large drop in value when you start withdrawing funds, sequential risk could wipe out your savings. Sometimes, market downturns are fairly short, but sometimes they last for years. The first 10 years of this century are known as the lost decade because it took that long to recover your initial investment.

If the stock market keeps climbing, sometimes you can draw money out and not run out of funds. If the market does not cooperate, you could have a major problem.

There are some products that guarantee you an income source that you cannot outlive. Maybe these have a place in your portfolio? You also have to be concerned about inflation.

Another way to fund a longer retirement is to work a little longer. For many people, working has been their way of life for 30 to 40 years. Some also are leery of losing the interaction with fellow workers after they retire.

There also is the fear about how to cover expenses when income drops due to retirement. The National Bureau of Economic Research explored the correlation between working longer and saving more. They found delaying retirement six months has the same impact on a person’s standard of living as saving 1 percent more for 30 years.

All retirement planning starts with an income plan. In the years leading up to retirement, reduce your debts and increase your savings. Plan to live longer and make sure your budget does its part.

Gary Boatman is a Monessen-based certified financial planner and author of “Your Financial Compass: Safe passage through the turbulent waters of taxes, income planning and market volatility.”

To submit columns on financial planning or investing, contact Rick Shrum at rshrum@observer-reporter.com.