Longevity and Retirement
- January 16, 2019
- by Endorphin Wealth Management
There is a perfect storm developing in retirement:
– Thousands of Baby Boomers are retiring every week in Australia, and
– The 100-year life will soon become common place.
The Long and Short of it
Longevity is increasing, and a 65-year-old today is living over 10 years longer than their parents and grandparents did. What this means is a longer period to fund in retirement and a requirement for larger retirement benefits.
One fundamental problem with retirement planning is that many professionals are under estimating how long they will live. Whilst most people use life expectancy statistics to determine how long they will live and how much they need in retirement, the issue with these tables is that 50% of people live beyond their life expectancy.
Whilst living an extra 3 to 5 years may seem irrelevant over someone’s lifetime, the finance impact is vast if left unaccounted.
Effects on your Retirement
Living an extra 5 years in retirement could mean you need an extra $200,000 in retirement saving (based on income requirements of $50,000 per year).
When planning for retirement, it is important to consider the financial / lifestyle impact of living beyond your statistical life expectancy. At Endorphin Wealth, we craft our advice to include a strategy for longevity, such as:
– Funding options available to reduce the impact of longevity.
– Discussions around the non-financial impact of longevity.
As a starting point, we always assume the client will live beyond their life expectancy by an extra 5 years. There are a number of strategies we use to address this scenario, depending on the client’s needs / circumstances.
Case Study – Mrs Jackson
The chart below is a real client example where their life expectancy was 88 (i.e. 2032). We structured her investments, superannuation and income stream to ensure her income requirements of $100,000 per year would be met, well beyond her life expectancy. The different coloured columns represent the different income streams we established as part of the strategy.
It is important to note that no outcome can be guaranteed, ultimately whether you are able to achieve your goals & objectives depends on your personal circumstances, changes to government legislation and investment performance. This highlights the need for ongoing advice.
Ongoing advice is critical to the process as an individual’s lifestyle can change quickly when they finish working. Endorphin Wealth recommends that, as part of responsible retirement planning, you regularly review your strategy to ensure it remains in line with your desired retirement lifestyle needs while considering your longevity and life expectancy.
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What our Clients Say
Robert Rich is a gun and has been a pleasure to work with, he spent a lot of time asking questions and listening to both my husband and I to get a deep understanding of our current financial situation of who we are and where we want to be. His advice has been comprehensive and easy to understand. The genuine interest and enthusiasm he has demonstrated has made the whole experience to date, fun and engaging (it has also been awesome to see some great financial results!). Rob is a great communicator and is always available to chat, meet up or respond to an email. We wish we had seen Rob earlier, and plan to have him as our advisor now and into the future, I have and will continue to recommend him and his services.
- Ellen Bond
Rob has been fantastic helping us set all our financials in order. We didn't want to have to worry about any of this stuff day to day. Rob put together a set and forget strategy that will see us in good shape for the future. Good guy, good advice, great help. Thanks again Rob
- Andy Wright
My husband and I had a wonderful experience with Rob. He is genuine and honest. He has done amazing things with our finances to ensure our future is set up the right way. He has gone above and beyond our expectations. I highly recommend Rob, he is an expert in his field.
- Anthea Husing
love working with Robert. He is highly skilled, practical and empathic. Nothing is a problem and he goes ‘above and beyond’. I have no hesitation in recommending Robert as an excellent financial advisor.
- Rebecca Carter
Robert has managed our finances over the last 12 months as if they were his own. He has an eye for detail and is incredibly enthusiastic. We have recommended him to all our friends & family.
- A. Miles
Rob has handled our finances for some time now. He provided us with sound advice and options. I highly recommend his services.
- Mathew Quinton
Robert Rich provided me excellent financial advice and assistance in finding the right insurance for me. He was incredibly patient, and I'd recommend him without hesitation.
- Edward Murrell
Rob has been helping me with my finances for just over 12 months now and i couldn't be happy, he is a wealth of knowledge and is amazing at what he does.
- Paul Scott Ray White
Phillip and the team provide quality advice. They carefully explain the available options and clearly set the client's interests as the priority.
- Jon Sutton
Rob has provided fantastic advise and clarity to myself and clients
- James Ruddick
Great guys! Amazing financial advice.
- Jay Boston
I cannot say enough about their professional manner and would highly recommend anyone I know to seek their services
- Heather B
Your knowledge of the financial market is up to date and your approach to my portfolio has been proactive
- Michael S
Thanks to Endorphin, I am now on the path to that dream of mine
- Jake F
The plan has definitely made a big difference to my lifestyle
- Josie W
It has been quite exciting and very comforting to have Endorphin looking after my financial future
- Susan A
They provided me with a sense of direction and security that I did not have previously
- Michelle C