A whole new world

My mother turned 65 last month and jogs, does yoga and seems to be enjoying life now more than ever before. One of her cousins is in her late 70’s and is equally busy and looks great. She’s also still lucky enough to have her mother around who is a healthy, sparkly 90-something year old! Nothing about these women says they are slowing down anytime soon and it’s a marvel to watch. I can only hope to age like that and to enjoy my retirement in a similar way.

While it is still up for debate, the general consensus is that the global population is expected to live longer. In preparation for this, we at Wealth Creed, now assume that the average client will live to age 100 and we take this into account when we do our retirement planning for all our clients. If we assume that a client starts working at age 25 and they retire at 65, it means they spend an equal amount of time in retirement as they do in the workplace. The question then becomes, will the money saved up be sufficient? Should clients retire at 65 and look after grandchildren until mortality? Does that picture change with an increased probability of them living to see 100 years?

Recent research has also suggested that, while people are living longer, many are living with and dying from non-communicable diseases such as diabetes, heart disease, cancer and mental illness.

Your financial plan needs to accommodate the possibility of all of the above, whether they come to fruition or not. It also needs to encompass how you plan to live out your latter years. A few examples of this are listed below:

  • Frail care (do you see yourself in a home or would you prefer to be looked after in the comfort of your own home? What is the cost of either option?)
  • Income sufficiency (will you have sufficient income in your latter years to maintain your current standard of living?)
  • A living will (what happens when you are no longer in the right state of mind to manage your affairs?)

It’s a tough discussion but one that must be had, whether you’re the one planning to retire or have a loved one in that position.

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