Money Management & Retirement Planning Advice by Barry Unterbrink, Chartered Retirement Planning Counselor

Tuesday, May 22, 2007

Living Large and Long

The longevity of humans on this earth is increasing year by year, and this will have profound effects on how we live, work, save and invest. This is especially important if you are a younger person now, as future advances in health and medicine will affect you more. Consider where we have been...

In 1,000 AD, life expectancy was about 25 years. Four hundred years later, it had jumped to 35, not bad. By the year 1800, one could expect about a 40-year life span. These figures seemed too low I thought. However, remember, very few lived to very old ages, and many died as infants or young from illnesses we now have cures for or medicines to mitigate the effects. Plagues and wars took their toll as well. The fastest advance in longevity took place the last 200 years, where life expectancy about doubled, from 40 to 76. This will no doubt lead to more challenges for us. I'll address two: the Social Security mess and the baby boomer generation, along with my job as a financial planner.

Social Security: Ida Mae Fuller, the first social security recipient in 1940, collected about $23,000 in benefits for her $25 in taxes paid into the system. Wow, that was a good deal. She did live to age 100 however. Our checks might not last that long due to a shrinking pool of workers to support the future beneficiaries. The politicians keep monkeying around with the rules with no real progress for a long-term fix. The Government will control the retirement age, qualifications, taxation, or they could just renege on the inherent promise of what social security was supposed to deliver. Given: the full retirement age will lengthen into the 70's.

Retirement Planning: 78 million U.S. births were recorded between 1946 and 1964. I’m a middle baby boomer. Are you? Boomer or not, are we prepared for the future? It will take an astute savings and investing plan to stay financially healthy into our 80's and 90's. That’s my job – understanding needs and advising clients on the latest trends and solutions to retirement planning using the financial markets and products designed for savings and income.

The fastest segment the next 15 years will be the 85+ group, but the 55-64 age group is right behind them with a 70% growth rate. What does all this mean to us? Well, if you are in good health and come from a robust "gene pool" you may spend more time in retirement than your working life. A 25-30 year career may be followed by a retirement from age 55 to age 95. A retired couple today aged 65 can expect one spouse to live to age 87! I can envision that in my children’s lifetime, they may need to work from age 30 to age 70, then retire and live 40 years in retirement (or semi-retirement). I think I’ll go exercise now to increase my own life span.
Barry Unterbrink, 954-719-1151

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