You might have missed it. The government released new findings this month that the life expectancy of Americans at birth has reached a record high. As we hit age 65, we now have a time horizon of 20 more years for women and 18 more years for men. The report found that healthier lifestyles and fewer deaths from major diseases such as Alzheimer’s disease, heart disease, cancer, stroke and chronic lower respiratory diseases have led to a life expectancy of 78.8 years for men and 81.2 years for women.
That sounds like a reason to celebrate but it should also strike a note of caution. Twenty years is a significant span of time to live off savings and retirement plans that you’ve built up after only 40 years of work. In addition, no matter how healthy you begin retirement at, health care will eventually become a significant cost at some point, as will housing costs.
An AARP study found that of workers aged 50 and older, nearly 40 percent admitted they weren’t saving anything to head off those costs and 44 percent indicated they had no intentions of doing so in the future. If you’re interested in a casual glance at some of those costs, check out this AARP calculator that looks at possible out-of-pocket health care costs in retirement.
Of course, health care costs aren’t the only costs likely to play a significant role in your ability to maintain your preferred lifestyle. Federal officials are looking at some unexpectedly high prices for generic drugs and housing costs can make a significant dent in savings especially if you live much longer than you planned. This week, Narrows Glen in Tacoma was in the news for a letter it sent to its residents that it was planning on raising its rates by $300 a month. An unexpected cost hike of $3,600 a year left residents outraged but does beg the question, how do you prepare for such an excessive unexpected cost whether it relates to new medication or treatment requirements, housing costs or some other unidentified costs?
While it’s no guarantee, a financial dashboard can provide you with the confidence of knowing you’ve developed a solid plan for staying ahead of those costs. But an unexpectedly longer life won’t just affect your health and housing costs. Come to a free LifePlanning seminar and find out what other issues you’re likely to experience as you age and then discover what steps you can take to build the best plan for you to help protect you and your family against those obstacles.