: ‘Assume you’ll live forever and plan accordingly.’ Planning for retirement for the rest of your life.

by | Mar 2, 2023 | Stock Market

Running out of money is retirement’s biggest financial risk—though this, of course, never actually happens. Thanks to Social Security, almost all retirees will have some monthly income, no matter how long they live. Still, Social Security alone probably won’t make for a comfortable retirement, though it is the financial cornerstone for many. In fact, Social Security accounts for at least 50% of income for half of retirees. That includes a quarter of those age 65 and up for whom their monthly benefit is at least 90% of their income—a statistic I find shocking.

Read: ‘When we retire, we lose a lot.’ How to avoid retirement shock. Want to do better? You need to not only save diligently during your working years, but also figure out how to draw down those savings over a retirement of uncertain length. That brings me to three sets of statistics that prompted me today to tackle the topic of longevity.
A recently released survey found that 48% of respondents believe they’ll outlive their retirement savings. To state the obvious, we should make it a priority to save enough during our working years so we’re financially comfortable for as long as we live—and yet half of folks think they’ll fall short.

I received an email from a correspondent who cited life expectancy as of birth as a guide for retirement planning. It’s not the first time I’ve seen this error made. When today’s 65-year-olds were born, life expectancy was age 67 for men and 73 for women. But life expectancies as of birth include those unlucky folks who die before reaching age 65. What if you make …

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