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Who doesn’t want to live to 100? If you could become a centenarian in good health, most Americans would. But what if your financial health was poor?
According to a recent study by Allianz Life, a life insurance company, 70 percent of Americans don’t feel financially prepared to live to 100 years old and beyond. Most Generation Xers (79 percent) and millennials (74 percent) feel “financially unprepared for living a longer life,” the study says.
And that’s not surprising. One hundred is a big jump: The current average life expectancy in the U.S. is just shy of 79 years. But even if you don’t make it that long, it’s still a worthwhile mindset.
“Having a better understanding of longevity gives people the chance to think of retirement in a new way,” said Allianz Life Vice President of Consumer Insights Katie Libbe. “Americans have the time to create a strategy that considers nontraditional opportunities such as an encore career or taking a gap year after school.”
Most Americans believe they will outlive their savings, but admit that financial security and health go hand-in-hand.
Only 57 percent of baby boomers feel financially unprepared for the long term, compared to three-quarters of their Gen Xer counterparts. Boomers may not be collecting Social Security or tapping into retirement funds just yet, despite being close to retiring or currently retired. This is a good idea if you can afford it. Holding off on tapping into Social Security means greater benefits in the long run.
“No matter the age, getting help to establish the right longevity plan can build a foundation that meets both long- and short-term goals,” Libbe said. “This gives people the chance to do things they’ve always wanted to do, like be a stay-at-home parent or pursue a different career.”
While the average life expectancy in the U.S. is 78.8 years, that number does keep going up. Half of respondents to the survey said that if they imagined living to 100 years old, “having enough money to last my whole life” was a major concern, despite admitting to needing a financial plan or budget to have enough money until they die.
While most admit that they need preparation and a retirement plan to live longer lives, only 22 percent said they “lacked a clear plan” in their lives when it came to budget planning. Respondents said they would have to work longer or retire later in order to be financially healthy until 100 years old.
Are you afraid of running out of money before you die? Start saving early and put money into a retirement fund. Even if you’ve hit the “50 or older” age, you still have time to save with catch-up contributions.
Keep working as long as you comfortably can. While you may be able to start cashing in on Social Security benefits as early as 62 years old, you can get more money if you wait until full retirement age at 70.
Still looking to save? Visit the solutions center on how to deal with credit card debt, student loan debt, or even personal finance management.
Published by Debt.com, LLC Mobile users may also access the AMP Version: Can You Afford To Grow Old? - AMP.