Broker Check


The Risk of Longevity

| January 20, 2017

Is “Longevity” a Risk You Need to be Thinking About? Perhaps a question we need to start with is… What are the risks of “longevity?” The first, and most obvious, thing that comes to mind is the risk of running out of money, but what about these:

  • Increases in the cost of living (aka inflation)
  • Increases in health costs
  • Potential long-term care costs (home health care, assisted living, nursing home care)
  • The taxes that go along with liquidating your investments for income
  • Changes in your standard of living
  • Losing income from the death of a spouse
  • Ability to leave assets or part of your family legacy to your children and other heirs

Incredibly, there was a recent study done by Lincoln Financial Distributors that found advisors address these issues with every client they work with less than 45% of the time! You may find that hard to believe, but we have found it to be true. Most of the second opinions we have provided over the years have concluded that that family’s plan was missing hedges against most, if not all these risks. Just imagine you have to live on the same income you had in 1996—not one single dollar more. Could you do it? We have seen retirement income set up that would have made this a certainty. And what about the plan for the change in income you will have if you lose your spouse? Which income you choose or are forced to take may have a profound impact. And these are only two of those 8 risks.

Your future reality lies within just one question: Do you believe you will be affected by at least one of these risks?

According to the Social Security Administration, one out of every four 65-year olds will live past 90 years of age. And this number is growing. Life expectancy increased 5 years from 2000 to 2015.1 What will it do in the next 15 years? Since medicine is so closely linked to technology today and Moore’s Law tells us that technology will double every year for the foreseeable future, well... it is highly likely that we could see a further increase in life expectancy of more than 5 years over the next 15 years.

As a part of our “longevity” awareness program this month, we are offering a no cost second opinion on your current plan. Remember today is the first day of the rest of your life. How long will that be? Don’t let longevity be the demise of your family.