Is It Overkill to Plan My Retirement to 100?

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About Bill Duggan

CFF®
Bill has been guiding clients to manage their financial lives since 1988. Bill spent 13 years in banking as a Trust Officer in Florida and Michigan, five years as a broker with Smith Barney in Troy, MI, and has owned his firm since 2004, located in Almont, MI, which is 40 miles north of Detroit. Bill has always put his clients’ interests first. While securities licensed, Bill maintains a perfectly clean record with FINRA, which you can check for yourself by going to FINRA Broker Check.

In today’s world, planning for retirement is more critical than ever. With advancements in healthcare, many people are living longer, healthier lives. This longevity trend raises an important question: Is it overkill to plan your retirement to age 100?

Historically, retirement planning was often based on the assumption that individuals would live until their mid-70s or early 80s. However, recent data from the Centers for Disease Control and Prevention (CDC) shows that life expectancy in the United States has increased significantly over the past century. Many people now live well into their 80s and 90s, with a growing number reaching and surpassing the century mark.

The Financial Implications

Planning for a longer retirement means ensuring you have sufficient funds to cover your expenses for an extended period. Here are some key considerations:

Inflation: During a retirement that spans 30 to 40 years, inflation may substantially diminish the buying power of your savings. To ensure your financial security, it’s crucial to implement strategies that guard against inflation when planning for a longer retirement.

Healthcare Costs: As you age, healthcare costs typically increase. Long-term care, prescription medications, and other medical expenses may add up quickly. Having a robust financial plan that includes provisions for healthcare is crucial.

Lifestyle Choices: Maintaining an active and fulfilling lifestyle in retirement often requires financial resources. Whether it’s traveling, pursuing hobbies, or enjoying leisure activities, planning for a longer retirement ensures you may continue to live life on your terms.

Benefits of Planning for Longevity

While it may seem excessive to plan for a retirement that extends to age 100, there are several compelling reasons to do so:

Peace of Mind: Having a solid plan in place for a potentially lengthy retirement may offer significant peace of mind. It helps alleviate the stress and worry that come with the fear of outliving your financial resources.

Flexibility: A well-rounded retirement strategy provides versatility. Should you not reach the age of 100, having additional savings might act as a buffer for unforeseen costs or enable you to leave a financial legacy for your family.

Improved Quality of Life: With sufficient financial resources, you may maintain a higher quality of life. This includes accessing better healthcare, enjoying leisure activities, and having the freedom to make choices that enhance your well-being.

Practical Steps to Plan for a Long Retirement

Start Early: Starting to save for retirement as early as possible allows your money more time to grow. Utilize employer-sponsored retirement plans, IRAs, and other savings options to maximize your retirement savings.

Diversify Investments: To effectively manage risk and achieve consistent growth, it’s essential to diversify your investment portfolio. Aim for a balanced mix of stocks, bonds, real estate, and other asset classes.

Review and Adjust: Regularly review your retirement plan and make adjustments as needed. Changes in your health, lifestyle, or financial situation may require you to update your strategy.

Consider Annuities: Annuities may provide a guaranteed income stream for life, which might be particularly beneficial if you live to 100 or beyond. There are various types of annuities to choose from, so consult with a financial advisor to find the best option for your needs.

Plan for Healthcare: Include healthcare costs in your retirement plan. Consider long-term care insurance and other strategies to cover potential medical expenses.

Planning your retirement to age 100 may seem like overkill, but given increasing life expectancies, it’s a prudent approach. By considering the financial implications, taking practical steps, and seeking professional advice, you may create a retirement plan that ensures financial security and peace of mind for the long haul. Ultimately, planning for a longer retirement is about preparing for the unknown and giving yourself the best chance at a comfortable and fulfilling retirement, no matter how long

Start planning for a secure and fulfilling retirement today! Consult with a financial advisor to explore strategies tailored to your unique needs and ensure you’re prepared for the long haul. Don’t leave your future to chance – take control now and enjoy peace of mind knowing you’re ready for whatever comes your way.

Many people have learned about the power of using the Safe Money approach to reduce volatility. Our Safe Money Guide is in its 20th edition and is available for free.  

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About Bill Duggan

Bill has been guiding clients to manage their financial lives since 1988. Bill spent 13 years in banking as a Trust Officer in Florida and Michigan, five years as a broker with Smith Barney in Troy, MI, and has owned his firm since 2004, located in Almont, MI, which is 40 miles north of Detroit. Bill has always put his clients’ interests first. While securities licensed, Bill maintains a perfectly clean record with FINRA, which you can check for yourself by going to FINRA Broker Check.

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Content in our posted articles is deemed to be accurate but topics, facts and laws can change. It is always a good idea to verify facts before making decisions. Always seek authorized and professional advice regarding financial decisions which includes investing, annuity purchases, tax planning, changes in a financial portfolio and retirement planning.

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