Saving for your golden years is one thing. Saving enough for your 100th birthday bash is quite another.
How many years will your retirement savings last?
If you don’t have enough cash stashed away to make it to age 100, it may not be enough, says Nicole Mayer of RPG – Life Transition Specialists, a wealth management firm.
“As people are living longer, they need a greater amount of savings to carry them through retirement,” Mayer says. “Between inflation, medical bills and other expenses, retirement savings need to last longer than 10 to 20 years.”
Living to 100 isn’t as outlandish as its sounds. There were 53,364 centenarians in the USA in 2010, according to that year’s U.S. Census.
The life expectancy for the average American was 78.7 in 2011, according to the National Vital Statistics Report.
Mayer says a common mistake is planning to one’s expected age of life rather than the maximum age, which causes some retirees to outlive their money.
“People should shift towards a 40-year retirement plan vs. a 20-year plan,” Mayer says. “However, to implement this type of strategy, savings need to be more aggressive whether it is starting to save earlier, retiring later or saving more in retirement accounts each month.”
Article By: Adam Shell