Technology is advancing at a breath-taking rate – including healthcare technology. As we continue to find ways to eliminate common diseases and extend the average person’s lifespan, some people are claiming that this century will see people living to be as old as 120. According to Ric Edelman, a financial planner, anyone living in the year 2030 can expect to live to be 120 years old. If he’s right, that will have major implications for retirement planning.
When Should I Retire?
The first thing to be affected by longer life spans is the idea of the right age to retire. If you’re going to live to be 120 years old, retiring at 65 means you have less half your life to earn enough money to support you for the rest of your life. The prospect of living longer (and feeling better for longer) could prompt many people to work long past the age of 65.
How Much Should I Save?
This is the most common question that tends to come up in retirement planning. Unfortunately, there’s no good answer. While family history can give us an idea into how long we can expect to live, modern technology has the potential to completely disrupt that system – which means it also has the potential to disrupt the retirement planning system.
How Can I Plan to Live to Be 120 Years Old?
Living longer will most likely mean working longer for a lot of people, but it will also mean that we’ll have to make some changes to the way we plan and save for retirement. While saving has always been key, investing has grown increasingly important in recent decades and it will continue to gain importance. Rather than saving up to a specific amount that may or may not last us the rest of our lives, the ideal situation is when we accumulate enough sound investments that we can live off our dividends without diving into our principal. This strategy will become increasingly necessary if doctors and scientists really do manage to extend the average lifespan to more than a century.
Plan for Healthcare Costs
Healthcare costs are currently one of the biggest areas of spending for people of all ages, but especially for senior citizens and those in retirement. Retirement planning already requires a significant amount of planning for increased healthcare costs (including the possibility of long-term care). If we succeed in making the average person a centenarian, what will the repercussions be in terms of healthcare costs? Will the average person get to live to be 120? Or will the healthcare technology that makes such an age possible be available only to the wealthy? To those for whom it is available, will they want to live to the age of 120 or will they choose to forego that kind of medical care?
These are all things you need to consider when planning for your retirement. Additionally, it’s important to keep in mind that your preferences might change as you near retirement, so be prepared to adjust your retirement plan if that happens.