Will Your Retirement Accounts Last You To Age 117?
By Brad Pistole,
Certified Financial Fiduciary® (CFF)
On July 22nd, 2018, the world’s oldest person died at the age of 117. Yes, you heard me correctly, she was 117 years old. She was born in May of 1901, and her family and friends knew her as “The Goddess.” The new oldest person alive is 115 years old. And the oldest person to ever live lived to be 122 years old.
Why does any of this matter? How many of you have ever said, “I want to live until I spend my last penny?” That would include most of us, wouldn’t it? Do you think most people have a plan for their retirement accounts that will last them 50 years past the day they stop working?
Has your current advisor ever sat down with you and said, “Let’s make sure we have a plan for your retirement that will guarantee your money will last as long as you live, no matter how long that is?” If not, why not?
In my book, Safe Money Matters, I talk about the #1 fear of retirees. As you know, for most people, their #1 fear is running out of money before they run out of life. I’m sure most of you don’t plan to live to age 117. However, I can assure you of this, more and more people are living longer than they expected to live. And for those people who are living longer than their life expectancy, running out of money is the #1 issue they face.
If your goals for your current financial plan are based on your average rate of return, then you are missing the boat. I can assure you, your average rate of return is not the most important factor for determining how long your money will last. Far too many people are fascinated with how much money is in their accounts. Yet, there is absolutely no plan for guaranteed lifetime income.
The old “4% rule of thumb” for investing would not work for any of the people mentioned above. In most cases, their retirement accounts would have been empty by age 90 or sooner. What they needed was an income plan that would last no matter how long they lived. If you think having an investment plan that would last you beyond age 100 isn’t important, think again.
In an article written by Steven Goodman on July 2nd, 2018, he says, “People who reach the age of 100 years or more, are currently the fastest growing part of the population.” And where does the highest concentration of people who are living to be 100 and older live? Take a guess. Japan? China? Korea? No. If you said, the United States, then you would be right.
In total numbers, the United States has the most centenarians with current estimates as high as 72,000. If the population of centenarians continues to increase at its current rate of expansion, there could be close to 1 million people of 100 years of age or more by 2050 residing in the US. http://www.thecentenarian.co.uk/how-many-people-live-to-hundred-across-the-globe.html
In fact, the United States has more than DOUBLE the highest number of centurions than any other country. Japan is the next closest country with approximately 30,000, and that number has quadrupled in the past 10 years.
As a Certified Financial Fiduciary® (CFF), I must always do what is in my clients best interest. And I assure you of this, making sure my clients never run out of income, no matter how long they live always at the top of that list.
If you have never heard the term, “Lifetime Income Benefit Rider” then you need to find a new advisor – today! There are retirement accounts that protect 100% of your principal and guaranteed that you and your spouse will have a monthly income stream, no matter how long both of you live, even if you live to be the new “oldest person on earth.” That sounds a lot better than an illustrated rate of return that is based on past performance and is not guaranteed.
There’s an old saying that goes something like this, “If ifs and buts were candy and nuts, we’d all have a Merry Christmas.” What does that mean? Have you ever heard anyone say, “If it weren’t for 2001 and 2008, I would have retired wealthy, but now I’ll be working until age 70?”
I can’t tell you how many times I’ve heard this from people who have asked to meet with me. They were all working with advisors that were focused on their rate of return, and they did nothing to protect their principal and ensure a lifetime income that is contractually guaranteed.
You might live to be 70. You might also live to be 105. We do not know. But I can assure you of this, no matter how long you live, the #1 thing that will matter most to you in retirement is mailbox money! You want to be 100% guaranteed there will always be a check in the mail every single month, no matter how long you live.
This is what I do for every single client I have. If you want to make sure you have guaranteed lifetime income for all of your retirement accounts, give me a call at 417-581-9222 or email me at email@example.com