No one has a crystal ball. If we did, we might ask three important questions:
-How long will I live?
-Will I have enough money if I live to age 100?
-How will I spend the time I have on this earth?
As wealth managers dedicated to increasing families’ wealth and legacies, we consider these questions and the related answers as extremely important.
We Americans are living longer. From 1980 to 2020, the number of Americans 90 years of age and older tripled to 1.9 million. And, by 2050, it is expected there will be 8 million 90 and over. This is a new paradigm. Historically, people retired in their 50s and early 60s and lived their last few years retired in comfort during the “golden years”. These days, someone retiring in their early 60s could live 30 or 40 more years. If so, will they have enough money and what will they do for that time period (perhaps 1/3 or more of their lifetime on earth)?
Life Expectancy. There are some good tools to help you estimate when your “plan will end.” Here are three:https://www.livingto100.com/, https://www.bluezones.com/ (click on tools), andhttps://www.myabaris.com/tools/life-expectancy-calculator-how-long-will-i-live/, (Note: each site will require you entering your email address) These tools can take 5-10 minutes. All look at personal health, family history and socioeconomic status.
Will My Nest Egg Hold Out? Next, it’s time to calculate your expected “financial independence” date. See our blog of April 21, 2015 http://www.dwmgmt.com/plan-for-financial-independence-not-retirement/ This is the date at which you have enough assets for the rest of your life without needing to work for money. Recently this “independence” date has been extended for many due to three principal factors; increased expected longevity, lower expected returns, and reductions in and uncertainty about pensions and social security. The financial independence calculation requires a review and monitoring of key current and expected metrics: assets, additions to assets, longevity, retirement income, inflation, investment returns, tax rates, and spending goals. Of course, all results must be stress tested and regularly monitored and revised as appropriate.
Meaning, Identity and Purpose in Remaining Years. Planning for the “golden years” goes well beyond money. Happiness, of course, is more than that. We discussed it in our September 9th bloghttp://www.dwmgmt.com/how-would-you-rate-your-life/. We ask our clients not only about their financial priorities, but also about their visions for their family, career, health, dreams, legacy, education and charity.
These days, more and more seniors are taking inventory on who they are, their accumulated skills and experience and want to stay engaged in the broader society and economy, continuing to be useful, active and “keep going”. Here are some recent inspiring examples in the news:
- Gerry Marzorati, former editor of the New York Times and author of the new book “Late to the Ball” has immersed himself in tennis since taking it up in his mid-50s. Mr. Marzorati recognizes that “Sixty is not the new 40. Fifty isn’t either. Your lung capacity in late middle-age is in steady decline as are your fast-twitch muscle fibers that provide power and speed. Your sight, senses and balances are getting worse.” Yet, undaunted, Mr. Marzorati concluded that for him, his “golden years” would be spent on “finding something new, something difficult- to immerse yourself in and improve at.” He threw himself into his new passion, hiring a coach, practicing for hours and hours and even entering competitions in his new love. No trophies yet, but fulfillment.
- Alan Page, the leader of Vikings’ Purple People Eaters, is about to start his third career at age 70. After his Hall of Fame NFL career, Mr. Page finished law school and became a Justice in the Minnesota State Supreme Court for 24 years until recent mandatory retirement. Now he and his wife will commit their full-time efforts to their Page Foundation, focused on educating young children, through money and mentoring.
- At 100, Ida Keeling is still running for her life. She has the fastest time for American women aged 95-99 in the 60-meter “dash” at 29.86 seconds. She is 4’6” and weighs 83 pounds. She said she was fast as a girl, though back then there were few opportunities for girls. What makes her faster now is that “everyone has slowed down.” She became a single parent of four when her husband died at age 42. Ms. Keeling’s daughter, Shelley, herself a track coach, got Ida back into running when Mom was 67. Her one hour of daily running gives Ms. Keeling a sense of serenity: “Time marches on, but I keep going.”
Go ahead. Take the test! See how long you will be at life’s party. Then, by yourself, or with help from a wealth manager like DWM, develop, monitor and maintain a financial, personal and family plan for the future that meets your priorities and visions. The future depends on what you do today. Go for it!