A recent survey by the Society of Actuaries on retirement planning and living to 100 concluded:
- Forty-eight percent of Americans aged 45-70 have no financial plans in place should they live longer than they expected.
- More 33 percent of Americans aged 45-70 are worried about running out of money during retirement, but only 20 percent plan to purchase an annuity or other form of guaranteed lifetime income to protect their assets.
- Nearly 71 percent of respondents said they plan to claim Social Security before the age of 70, despite the society's recommendation that people claim Social Security as late in life as possible to help secure more guaranteed lifetime income in retirement and help hedge against the risk of outliving assets.
The same people who don't hesitate to buy fire insurance are ignoring the potential for outliving their money and refusing long-term care insurance and lifetime annuities -- even though the likelihood that they will live past 85 is far, far greater than the potential that their homes will burn down, says Anna Rappaport, chair of the Society of Actuaries' Committee on Post-Retirement Needs and Risks.
Rappaport isn't recommending that you get rid of your fire insurance. But she thinks that anyone planning for retirement should consider how they will pay the bills under any of these circumstances:
- If they live to be 100.
- If their spouse lives to be 100.
- If their spouse dies and leaves them alone.
- If they incur large medical bills.
- If either partner needs long-term care.
- If they suffer from Alzheimer's or some other cognitive decline.
- If they can't stay in their home and have to sell it and live somewhere else.
- If earning an income in retirement is out of the question.