I frequently joke with financial planning clients that dying young increases the success of a plan, since it means life-savings need to last for fewer years. However, since there isn’t a way to accurately predict lifespans, it’s prudent to take a longer lifespan into consideration when planning. Better be safe than to run out of money! Indeed, depending on individual situations, I use 90, 95, or even 100 as ending ages in financial plans.
As people live longer, their financial assets need to last longer in order to support them. Dr. Aubrey de Grey, chief science officer of the SENS Foundation (Strategies for Engineered Negligible Senescence) asserts that medical science has discovered various ways of slowing the aging process by repairing certain types of cell damage that occur as a result of getting older. In an interview on the Goldstein on Gelt radio show, Dr. de Grey said, “If we can repair that damage periodically, then we will do a much better job of postponing the diseases of old age.”
As Dr. de Grey and other scientists work to perfect anti-aging techniques, average life expectancy continues to grow. “We’re talking a reasonably long way, but still on the scale of a human lifespan, which is not that far, which means that quite a lot of people who are alive today or even adults today may live long enough tobenefit from these therapies when they arrive,” asserts Dr. de Grey.
What are the financial effects of a growing elderly population? Will people retire much later, or will they work longer, perhaps beginning a second career mid-life? A lot depends on the medical progress that will be made over the next 25 years.
Either way, as life expectancy increases, the importance of retirement planning increases. Speak with your financial planner to determine if your assets will last throughout your golden years, as you may be living even more of them.
To watch my interview with Dr. Aubrey de Grey and go to www.GoldsteinOnGelt.com or read the transcript of my interview with Dr. de Grey.
Douglas Goldstein, CFP®, is the Director of Profile Investment Service, Ltd., which specializes in helping people who live in Israel with their US dollar assets and American investment and retirement accounts. He helps olim meet their financial goals through asset allocation, financial planning, and using money managers.
Published April 9, 2012.