What is Longevity Risk?

FESCH.TV INFORMIERT:

Longevity Risk

Longevity Risk creates the fear of outliving your income. Living beyond your income can have severely adverse effects on your lifestyle, sense of independence, and emotions. It could mean having to live with your children, being supported by the government, or outright homelessness. The loss of independence can be quite embarrassing and emotionally difficult to acknowledge.
We all know that people are living longer. Back in the 1950’s for example, people did not need much retirement planning. During those years, when someone retired at age 65 their expected lifespan was only another 7 years or so. It’s not terribly difficult to plan for just seven years in the future, and most people simply made-do. In the 1950’ss there was little fear about outliving your income.
The retirement planning picture today is quite different. A person retiring at age 65 is expected to live well into their 80s, and possibly longer. The fastest growing population is people living beyond age 90. If that turns out to be you, a retirement of 25-30 years is not out of the question.
Under the best of circumstances, managing retirement income for that long is quite challenging. In fact, 41% of CPA financial planners say running out of money is their client’s top concern, including clients who have a high net worth.
And it doesn’t end there.
Further research from Allianz Life Insurance Company reveals that 61% of people between the ages of 44 and 75 fear running out of money more than they fear death.
What does this all mean?
Almost everyone is subject to longevity risk.
Now it’s your turn
Take a moment and ask yourself what your life would be like if you prematurely spend-down your money and saw your income disappear while you were still quite healthy. How would you feel if you lost your independence? What if you had to rely on family, friends, or the government for assistance? What if you had no choice but to cut back on all the things you enjoy like travel, restaurants, movies, and music?

Contact us today to learn more about how longevity risk may affect you.