As time goes on we see more and more information on Long Term Careand the need for it. Longevity for Americans hasbecome more predominant, but the need for LTC has too. Also, making sure yourincome will live as long as you do have an increased importance now. It isimperative we meet with a financial advisor to plan properly to insure ourmoney will last as long as we do. An article by Philip Moeller with U.S.News shows us how Americans are living longer.
Older Americans are paying attention to the steady stream ofresearch findings and stories about impressive gains in longevity.
In particular, we have a pretty accurate view of theincreases achieved in average life spans, according to the sixth biennial studyof longevity sponsored by the Society of Actuaries (SOA).
Ask Americans age 65 and older how much longer they expect tolive, and you’re likely to get a fairly accurate response, the SOA reports. “Byage 65, U.S. males in average health have a 40 percent chance of living to age85 and females more than a 50 percent chance,” the report says, and “thesurvivor of a 65-year-old couple is more than 70 percent likely to reach 85.”
There also are encouraging signs that this recognition is leadingto changes in financial planning and preparation for a longer retirement. Inparticular, greater attention is being paid to the age at which people begin tocollect Social Security.
The program’s early-retirement benefits can begin at age 62, butrise by about 8 percent a year for each year benefits are delayed until age 70.As people have become more confident that they will live to older ages, theappeal of delaying Social Security is on the rise.
But if we “get it” about longevity, the SOA warns, we still have avery sketchy understanding of longevity risks, a catch-all term thatencompasses concerns about amassing enough money for retirement and thenproducing sufficient annual income payments so that we do not outlive ourassets. “Many fail to understand the potential consequences of living beyondtheir own planned life expectancy,” the report says. “Many people are notfocused on risk management, and making assets last for the rest of their livesis not their highest priority.”
In thinking about the implications of longevity, three strongthemes emerge from the SOA’s research and public polling:
1. Beware of the averages. By definition, our collective lifespans represent an accurate figure on average longevity. But individual lifespans differ greatly from these averages. “When people are told they will liveto an age such as 80 or 85, they don’t realize this means there is a 50 percentchance they could live longer than that age,” the report says. People with lotsof education and financial resources are likely to live much longer thanaverage.
Likewise, Americans with little money or schooling are likely tolive shorter lives, a fact that is often overlooked in proposals to increasethe Social Security retirement age. The nation’s longevity gap is distressinglylarge, the SOA report notes. “In the poorest part of the United States, lifeexpectancy at birth is as low as in countries like Panama or Pakistan, a full 15years behind the wealthiest and healthiest regions of the nation, where itrivals that of world leaders, Switzerland and Japan.”
2. Understand your health risks. Lifestyle choices dominatelongevity gains until we reach old age, the SOA says, at which point geneticsis the greatest driver of remaining life spans. Beyond influencing how long welive, the ways we take care of ourselves can also determine the quality of ourlives as we age as well as the financial burden of older-age health expenses.
Women face more serious older-age health issues than men, in partbecause they live longer. “One actuarial research study predicts that for ahealthy male age 65, 80 percent of his remaining lifetime will be spentnon-disabled, 10 percent in mild to moderate disability, and another 10 percentin severe disability,” the report says. “For females, the correspondingdisability percentages are considerably higher, with 70 percent in healthystatus and approximately 15 percent in each of the two stages of disability.”
Again, these are averages. Individual outcomes can be dramaticallyinfluenced by our behavior. The report’s polling of older Americans found thatnearly half of those surveyed said their health and lifestyle decisions weremajor factors in their personal longevity expectations. “The message isbeginning to be heard and heeded,” the report says.
3. Anticipate cognitive decline. Even normal aging brings reducedmental abilities, making it harder to understand money matters, make soundfinancial decisions, and protect yourself from financial fraud.
For the considerable population that will have some degree ofdementia, the problem can be much worse. Research cited in the SOA reportsuggests that a household’s prime financial decision-maker hangs onto this rolefor too long. By the time the household recognizes the problem, it may be toolate to avoid serious money problems that could have been avoided. Considerinvolving younger family members in financial planning and decisions. Even ifthey initially serve only as a back-up to your own financial planning andmanagement efforts, their advice can be helpful. And they will be likely to seesigns of cognitive decline before you do, and will already have the knowledgeabout your finances to step in quickly and provide help.