Americans Live Longer, Retirements Last Longer

Most Americans underestimate how long they will live. For the first time in history, the average life expectancy in America is over 78 years. A healthy 65 year old woman has a 50% chance of turning 88 and a 25% chance of turning 94. A healthy 65 year old man has a 50% chance of turning 85 and a 25% chance of turning 92. Even with these numbers, 20% of pre-retirees and about 25% of current retirees believe they will not live longer than 85 years.

As life expectancy increases, so does the length of retirement. Today, a nest egg for a couple in its 60s needs to last for at least three decades. In fact, many financial advisors are setting an individual’s life expectancy at 90 to 100 years. It is also important, when creating a nest egg, to take in to account the high cost of health care.

Jilian Mincer, Living Longer: The Good News and Bad, QMS Financial, Apr. 6, 2011.

Special thanks to Jim Hillhouse (WealthCounsel) for brining this to my attention.