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Lessons on living to age 114

By Barbara Whelehan · Bankrate.com
Friday, April 22, 2011
Posted: 1 pm ET

What's worse? Dying young, or living well into a second century?

Without question, the latter scenario presents a retirement planning conundrum.

Last week, on April 14, Walter Breuning of Montana passed away. He had the distinction of being the world's oldest man at age 114. His philosophy was to embrace change, according to a wonderful remembrance of his life, based on an AP interview done last October at the Rainbow Retirement Community in Great Falls, where he lived.

I found the article from a blog posted by Kip McDaniel, editor-in-chief of Asset International for Chief Investment Officers magazine. He notes that the current oldest living man is now 113-year-old Jiroemon Kimura of Japan. Besse Cooper of Monroe, Ga., who turns 115 this August, is the oldest person in the world.

In an article he penned in the fall of 2009, McDaniel said that people who live well beyond 100 are "a British pension trustee's worst nightmare." In other words, the people who run traditional pension plans consider longevity risk a huge problem. They sometimes arrange a full or partial pension buyout to transfer that risk onto a third party and off the sponsoring employer's hands.

McDaniel noted that in England as here in the U.S., traditional pension plans are a dying breed. Breuning, he wrote, hails from the U.S., where "the problem of retirement funding is different, mainly because of America's general acceptance that longevity risk lies not with the employer, but with the employee."

Oh, really?

The truth is, we're not happy about this risk, and we'd much rather transfer it to someone else. Anyone else. Transferring the risk to an employer sounds good. Nearly seven out of 10 Americans said they would like their employer to offer an annuity option as part of their company's retirement plan, according to the 9th annual Study of Employee Benefits Trends by MetLife.

But employers are reluctant to assume this risk, and they're even reluctant to hire a third party to take it on. An article in April's Plansponsor magazine notes that just 3 percent of employers plan to introduce insurance-type retirement income products in 2011. What's holding them back? They're waiting for a safe harbor -- clear regulations that will protect them from liability in case things go awry.

Some progressive companies do offer such an option, but once employees see the details, they're not so quick to sign on. There are a lot of trade-offs involved.

Breuning believed retiring young was one of the worst things a person could do, according to that AP article. He retired from his job as a railroad clerk at age 67, and then went on to live another 47 years.

"Don't retire until you're darn sure that you can't work anymore," he was quoted as saying. "Keep on working as long as you can work and you'll find that it's good for you."

"That money's going to come in handy," he said.

Check out Bankrate's longevity calculator to see what your life expectancy might be.

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