Yes! -- you can reasonably expect to live a long, long life and you should start planning for it now.
- Population projections tell us that centenarians, those aged 100 and over, rose 87.7 per cent between 2004 and 20111 -- and the number of centenarians is expected to triple or quadruple by 20362.
- Today’s 65-year-olds can expect to live 20 years beyond retirement, on average3.
Accordingly, you should start your income longevity planning right away.
- Decide on your desired retirement lifestyle.
- Add to your Registered Retirement Savings Plan income with a complementary portfolio of investments.
- Assess your projected spending for essential and discretionary expenses and adopt an investment strategy that will match your spending needs. For example, plan to meet such essential expenses as housing, food, clothing and medical treatments for longer than your life expectancy; plan to spend an increased amount for discretionary expenses like travel, dining out and a new car during the first ten years that diminishes thereafter.
- After retirement, manage your retirement savings withdrawal rate based on the size of your retirement savings, the average return on your investments over time, and the number of years you plan to make withdrawals.
- Use life insurance to shelter excess capital and maximize the value of your estate; consider a life annuity that will provide a guaranteed regular income no matter how long you live.
- Protect your income (and your spouse’s) with life insurance and supplementary health insurance including disability, critical illness and long-term care coverage.
- Revisit your plan regularly to assess investment performance, changes in expense levels or any other factors that can impact on how much you can spend in retirement and for how long.
On your 100th birthday you’ll need a really big cake to hold all those candles. Ask your professional advisor about how income longevity strategies can help make sure you`ll enjoy a comfortable retirement until it`s time to blow them out – and then look forward to 101 and beyond.
1 Annual population estimates by age group and sex at July 1, provincial perspective — Canada, Estimates are final intercensal up to 2005, final postcensal from 2006 to 2008, updated postcensal for 2009 and 2010 and preliminary postcensal for 2011. 2 The Daily (Statistics Canada), Wednesday, May 26, 2010 3 The Daily (Statistics Canada), Tuesday, September 27, 2011 - Deaths
This column, written and published by Investors Group Financial Services Inc. (in Québec – a Financial Services Firm), and Investors Group Securities Inc. (in Québec, a firm in Financial Planning) presents general information only and is not a solicitation to buy or sell any investments. Contact your own advisor for specific advice about your circumstances. For more information on this topic please contact your Investors Group Consultant.