Issue 15.17
When Social Security was established in the 1930’s the life expectancy at birth was 58 years for men and 62 years for women, and the retirement age was 65. This might look fishy on the surface and lead us to believe that the government set the retirement age at 65 so that Americans would pay into Social Security, but would not live long enough to collect the benefits. The truth is, that life expectancy statistics in the 1930s were skewed due to high infant mortality rates. If you remove infant mortality from the equation, life expectancy in the 1930’s for men was actually around 78 years and for women was 80 years (Reference – US Social Security Administration).
Today the retirement age of 65 remains the same, but the average life expectancy continues to rise dramatically. Not only are Americans living longer, our healthier lifestyles and medical advances are helping us live more actively during retirement. Nowadays 65 doesn’t equate to sitting on the couch watching TV all day. Retired Americans are playing sports, learning new hobbies, traveling, serving their community, and even continuing to work.
In 2015, the American Institute of CPAs surveyed financial planners to investigate the top retirement concerns among their clients. The result was unsettling: over half of financial planners surveyed indicated that outliving their savings was their clients’ number one financial concern. In many instances, this fear exceeded the fear of death. Needless to say, when it comes to preparing a retirement plan, time is of the essence. No matter what stage of life you are in, it’s a good idea to meet with your financial professional on a regular basis and let them help you plan your financial future. Remember, it may last much longer than you think.
Mitch is an investment advisor for Heaton Financial, PC. Contact Mitch to schedule a FREE financial risk analysis 435-272-4362.