Better With Age: Why Longer Life Expectancy Requires Greater Financial Planning

“You are never too old to set another goal or to dream a new dream.” – C. S. Lewis

Old age should not signify the waning years of a life well-lived, but the beginning of new opportunities. As author C.S. Lewis once said, working towards new dreams and goals should be an endless pursuit, regardless of your age. As longevity becomes more common, it is just as important to be financially prepared to achieve those dreams.

It is no secret that people in the United States are living longer than ever before. Over the past four decades, changes in lifestyle, advancements in healthcare and environmental factors have attributed to an increasing life expectancy among Americans of all ethnicities. Today, the average American lives to be about 78 years old, an increase of 5.6 years from 1980.

For those in the upper tier of the economic bracket, life expectancy jumps even higher. According to a 2016 study authored by the JAMA Network, from 2001 to 2014 Americans in the top 1% of earners lived on average 10 years longer than those in the bottom 1%.

While many factors influence life expectancy, it is a common understanding that increased wealth typically translates to living longer. A longer life gives you more opportunities for memories and experiences but also brings increased costs. Living longer is great but better if you can maintain the standard of living to which you have grown accustomed. High-net-worth individuals benefit from partnering with a trusted team of financial advisers who can provide a wealth management strategy that integrates investment and financial planning for long-term success.

As part of Welch Hornsby’s work with wealthy individuals and families, our team will identify many areas of focus in a long-term financial plan, which typically includes planning for three areas: health, fun and life transition.

Health

Quality healthcare is one of the leading expenses for many American individuals, but especially for high-net-worth individuals. In fact, those with more than $10 million spend four times as much on healthcare services and invest more resources in preventative care.

At Welch Hornsby, we understand that an investment in your health is even more important than a financial investment, but the truth is that the two are becoming one and the same. Considering that healthcare premiums continue to increase and the policy features available through long-term care insurance are shrinking, it is important to structure your wealth management strategy to accommodate these costs.

Fun

Many of our clients have retirement as a goal. Often travel and leisure activities are also an important goal. The longer you live, the more opportunities you will have to take trips with your friends and family, or even travel independently.

Regardless of how you wish to spend your free time after retirement, it is wise to set aside an annual budget within your financial planning strategy to ensure you have the appropriate amount of assets to accommodate your interests.

Life Transition

Regardless of your age, it pays to be prepared for any of the many changes you may face in life. In your later years, you are more likely to make new housing arrangements, move closer to family, enter retirement, or make changes so that you can tend to aging family members. Each of these transitions comes with its own unique set of financial planning challenges, and we at Welch Hornsby work closely to provide a tailored approach to meeting each challenge head on.

As a true firm of fiduciaries, you can trust our team to guide you through a thorough process to develop a financial plan driven to achieve your objectives.

Our team is ready to talk with you about how we can provide comprehensive wealth management advice as you prepare to navigate the various financial scenarios that come with increased longevity. To schedule a meeting, contact us here.

Written by Brandy B. Hydrick, CFP®

The information and data contained herein has been obtained from sources believed to be reliable, but is in no way guaranteed by Welch Hornsby as to its accuracy. Opinions and projections are as of the date of their first inclusion herein and are subject to change without notice to the reader. As with any analysis of economic and market data, it is important to remember that past performance is no guarantee of future results.