There’s one critical assumption that you need to make when you create a financial plan: How long will you live? Without an projected longevity date, we can’t make projections on your wealth and how you’ll create income before you leave this earth. 

Life expectancy is the foundation for any retirement plan. And, since no two investors are alike, you need to have an honest conversation with yourself about your own longevity. 

The current average life expectancy for a woman in America is 79. For men, it’s just 73. For financial planners, it’s easy to use a conservative number like age 95 because it over-shoots the averages and can create a plan that will out fund our average lifespan. But with a little work, you may be able to be a bit more precise and build a plan that actually fits your health, lifestyle and family health history.

Take a deep dive into your parent’s and grandparent’s health history. Is there a history of heart disease or several instances of cancer in your family’s past? If so… were health problems pervasive enough to end their lives early? With that information, you have the opportunity to address those health problems and their potential to affect your life. 

In addition to an investigating your family health history, take an online longevity assessment. There are several listed as ‘life expectancy’ or ‘lifespan calculators’. They will ask a series of questions about your health history and lifestyle and will come up with a projected lifespan. 

There are ways that you can protect your income from being depleted if you have a long-term illness. Talk to your advisor about Long Term Care coverage. Many LTC policies are ‘use it or lose it’. If you don’t need the coverage, you may have paid thousands in premiums over the years. Discuss a hybrid policy that can give you coverage that does not waste your investment if you don’t need the coverage.

Questions?