Bad Habits = Higher Retirement Spending

Nothing makes me more stressed than listening to Alison Janey on those Kaiser Permanente commercials encouraging preventative care so that we all “Thrive.”  She’s a highly paid actress.  What about the rest of us who worry about our money lasting through retirement?


First, a terminology lesson.


Life Expectancy, a term that’s used a lot (IRS Life Expectancy Tables, for example), means the average age at which half of a group is dead and half is still alive.  Depending on your source, the average life expectance for an American is 78-79 years old.


Why, then, does your financial advisor insist on planning for you to live to 95?  Or even 100?  Because if we plan for you to life to 78 and you spend all your money, but are part of the 50% of people who beat the average, you may have up to 20 years of living in poverty.


Clients often say, “Oh, I won’t live that long.  My mom died at 75 and my dad died at 80.”  Yes, but only about 20 – 30% longevity has proved to be caused by genetic factors, whereas lifestyle has about 70 – 80% of possibility to affect the life expectancy.*


How does longevity affect your retirement plans?


Not at all, really.  It’s the number of years you plan to be retired that can increase or decrease the target annual spending from retirement accounts.  For example, the rule-of-thumb “safe” withdrawal rate for someone retiring in their mid-60s is 4% of assets.  Retire in your 50s that number drops to 3%, wait until your 70s, it goes up to 5%.


So, it’s not your age so much as how many years you plan to not work that counts.  Of course, some people have real illnesses what will cut their lives short.  But studies show that the more educated and financially stable you are, the higher the likelihood that you will live into your 90s.


According to my results from, I will live until age 97.  Meaning I should probably work until I’m 70 and keep the pedal to the metal on those savings goals!



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