While people’s projections of rising life expectancies in general match actual trends, for retirement planning purposes they should consider their “healthy” life expectancy as well as their total expectancy, a report has said.
A report by the TransAmerica Center for Retirement Studies showed, for example, that respondents in the U.S. projected on average that they will live to 85, but when also asked at what point they expect to experience health problems, it was at age 80.
It said that declining health was the most frequently cited retirement concern, cited by 50 percent, above the 40 percent who cited running out of money and the 36 percent who cited not being able to remain active.
“The probability of declining health in older age is real. Such a decline can frustrate even the best retirement plans,” it said. “Although it is difficult to realistically estimate whether and how much time an individual will spend in declining health in older age, it is important to contemplate the possibility when setting forth lifestyle and financial plans for retirement. Factors to consider range from a person’s ability to pursue retirement dreams (e.g., travel), healthcare preferenc¬es, and desire to remain living in their own home versus a care facility.”
“Faced with these concerns, it is critical that people plan for all eventualities. A retirement plan is no longer simply a matter of saving in an employer-sponsored plan or retirement account. It requires making good lifestyle choices that promote good health today and maintaining health in older age … By formulating retirement strategies that consider various uncertainties, workers are in a much better position to save and prepare, adjust to unexpected life events, and ultimately, to achieve their retirement aspirations,” it said.