Increased life expectancy among Americans—which currently stands at 76 years for men and 81 for women—has extended the average retirement period to 18 years, and it highlights the need for individuals to have a comprehensive plan for saving and investing, according to BMO Wealth Management U.S.
A survey of more than 500 Americans age 55 and older finds top concerns about a lengthy retirement are health care costs and quality of life (46%), being a burden on family members (45%), and running out of money during retirement (44%). Respondents identified their most significant investment and retirement issues as a desire to maximize retirement income (22%), fear of outliving their savings in retirement (21%), and the impact of long-term care costs on personal finances (19%).
The survey also found spouses and partners often have different opinions about long-term financial goals. The discrepancy cited most frequently among couples was when and how much to save for the future (28%), followed by retirement goals (27%).
BMO notes that many Baby Boomers are remaining in the workforce longer in order to grow their retirement nest egg, meet retirement and estate planning goals and stay active, and says those worried about longevity may need to consider this as an option. As for the concern about outliving savings, the company says individuals should know to plan for living beyond the average life expectancy.
BMO adds that individuals need to know what medical expenses to expect. In addition, it points out that risk tolerance changes as individuals age and investments need to be managed with that in mind.The full survey report, “The Aging Economy: Improving with Age,” may be downloaded from here.