Here’s a deceptively simple question posed to working Americans in the New Retirement Mindscape II survey sponsored by Ameriprise Financial:
How many years do you estimate you’ll live on your retirement savings?
A). 15 years
B). 20 years
C). 25 years
D). 30 years
In the survey, most people answered “B,” showing they greatly underestimate the time they are likely to spend in retirement.
Unfortunately, the correct answer is “D,” or 30 years.
According to the survey sponsors, “while the average retirement age is 62, there is a 50% chance that at least one spouse of a married couple at age 65 will live to age 92 — which is why most financial advisors recommend that consumers plan for a retirement that will last 30 years.”
If your savings are only adequate for a retirement lasting twenty years or less, you run the risk of running out of money.
And since women usually live longer, it’s more likely that the female spouse, in a couple, will be left short of funds toward the end of her years (women age 65 and over are twice as likely to live in poverty than men).
One of the keys to planning for retirement is understanding how long it might last.
Need help with a plan to get you there? Give us a call to get started.