Planning for retirement is an important goal for all of us; but in doing so, you also need to consider how long you think retirement will last. No one has the crystal ball that tells us our life expectancy, but no one wants to run out of money during retirement either.
According to the Social Security Commission, the average life expectancy for those still alive at age 65 is 84 for men and 86 for women. Keep in mind though, that those are just averages. The same data shows that one in four people alive at age 65 will live past 90 and one in ten will live past 95. So, don’t plan on being “average.”
If you want to plan for the uncertainty of your life expectancy, you may want to transfer some of that risk onto a third party by increasing or acquiring sources of lifetime income. Some of the mechanisms that may help you in accomplishing this goal include:
- Deferring Social Security benefits
- Electing life annuity payments from an employer-sponsored plan
- Purchasing a life and/or deferred annuity
Of course, no one strategy fits everyone’s retirement needs, so be sure to consult with a trusted financial advisor to address how you may plan for such uncertainty. To learn more about the uncertainty you may face and how you may plan to address that uncertainty, click here.