So much of our lives are dictated by time, everything from business to personal fits into its ephemeral framework: planning travel time for road trips, scheduling time for work meetings, letting time slip away with old friends. Our world revolves around time-- chasing it, grasping it, using it.
Luckily with the ever-decreasing mortality rate, Americans can expect to add a few years to their life expectancy. This is a beautiful thing-- it allows us to have more time with loved ones and experiencing the wonders of the world. Living longer also means that people will have to have more money saved in order to live comfortably.
Life expectancy has continued to increase in the last decade, meaning living to 100 is not at all an unrealistic assumption. How can you get there? Studies show that the best way to live a longer and happier life is by exercising and staying active.
Just because you get older does not mean that you have to give up on all of the activities of your youth. Don’t over-exert yourself, but do keep to an active lifestyle. Activities could include:
Pick something that will fit seamlessly into your routine or something that you can easily build a routine around. Retirement life is quite different for many people, and keeping up with these activities will help you in ways that are not just physical-- quite often through exercising people find a community. My parents both continue to play golf and are in their eighties! All of these activities will keep you moving and keep you healthy. The endorphins you receive through exercise, will help you maintain a happier life, longer.
By being active you also work toward decreasing your medical expenses in retirement. AARP reported that the average 65-year-old couple will spend about $240,000 in medical bills during retirement. This number does seem really high, but over the course of your lifetime when you factor in medications, premiums, copays, eyewear, and hearing aids, that number becomes more realistic. Medicare will be able to cover some of these costs, but it is important to have a number to work with.
Saving with medical expenses in mind is crucial to a successful retirement strategy. By staying active, you put yourself in the best position to not have to spend as much of your retirement savings on medical-related expenses.
Retirement can sometimes feel like a numbers game. That happens because often times when we think about retirement the core question on our minds is: how much do I have to save?
A perusal on Google will tell you that anywhere from 1 to 1.5 million dollars is a safe bet. If this number seems a bit alarming to you, don’t worry because you are in good company. Northwestern Mutual’s 2018 Planning & Progress Study reported that, “78 percent of Americans say they’re ‘extremely’ or ‘somewhat’ concerned about not having enough money for retirement. Additionally, 66 percent believe that they’ll outlive their retirement savings.”
Reverse engineer your retirement savings goal to afford to live a longer life. Think about your fixed expenses in retirement:
Chart out a realistic number for each of these and multiply them by the number of years you wish to or anticipate to live. This way you will be able to come up with a number more customized to your intended lifestyle and the best ways to reach that goal.
Like all savings strategies, saving for retirement is a long process that should be built over time. The best time to start saving is now. Even if you are among the 50% of Americans who have nothing saved for retirement yet, that is ok. Make a change today and start establishing your savings practices. It is never too late to start saving for and investing in the future you wish to see.
Now that you have an idea of what number you are working with, how do you get there?
The first step is to begin creating your retirement budget. In this document, you should take into account the fixed expenses we discussed above and also your projected income including any stock, pension, and healthcare options. Laying all of this information out will be helpful to you as you move through your savings goals.
If the above task is still feeling really overwhelming for you, that is ok. There are professionals who do this sort of work every day who would be happy to learn about you and your needs to help you devise a great financial plan to help meet your retirement goals.
With the right financial plan, you too will be able to stand the test of time.
Wood Smith Advisors, a woman-owned Registered Investment Advisor (RIA), is a fee-only financial services firm that partners with its clients to simplify their financial lives. We focus on women, entrepreneurs and individuals with complex financial situations, providing objective and competent advice, education and services to help them develop and build their businesses and reach their financial goals. We can be reached by clicking here.
"Finance Made Simple" blog posts are intended for educational purposes and not for specific advice. Each person’s situation is different. Consult your financial advisor for advice relating to topics discussed.