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Two Ironic Surprises about Women and Longevity

You eat right, exercise and do our best to take care of yourself. You not only want to be healthy, you want to live a long, full life and enjoy all you can.

Ironically, longevity tremendously complicates your financial situation. In the old days, when lives were much shorter, running out of money was less of a concern. You worked until 65 and died 5-10 years afterward. Living into your 80’s was unusual, but fortunately many people were supported by pensions.

Today, the average 50-year old woman is likely to live to about age 83 [1]. But that doesn’t tell the whole story. Recent research has two surprises for you that may change the way you look at your ability to make your money last.

The Surprising Impact of Wealth

It turns out that money even impacts longevity. As you move up the socioeconomic scale, life expectancy increases. Independent research estimates that the richest group of women are likely to live to about age 92 [2], more than 10% longer than the typical woman. That additional nine years can put a lot of strain on your finances.

Why are wealthy women expected to live longer? The primary reasons are less risky health behaviors (read: smoking) and access to better healthcare.

Keep in mind that 92 is just the average. As you’re doing your financial plan, if you’re wealthy, you need to take into account the chance that you may live longer than the average age of 92. For our financial plans, we presently set expectations that a healthy woman will live to either 95 or 100.

Longer Periods of Chronic Disability

But there’s another complication to your financial planning. With their long lives, independent research also shows that women are more likely to have longer periods of chronic disability [3]. Worse yet, because they are less likely to have a spouse-caretaker (due to outliving their husbands), women are more likely to need care in a long-term facility or from a paid caregiver. Think about those costs!

No question, the greater longevity of women makes it significantly more difficult to make your money last. But these two research findings – the impact of wealth on longevity and the likelihood that a woman will incur relatively long periods of chronic disability – make it much more difficult for women to make their money last.

The bottom line: The added complexity connected with women’s longevity underscores the importance of taking smart steps to make your money last. Let us show you how.

[1] SSA Period Life Table, 2013

[2] National Academies of Science, Engineering and Medicine, 2012

[3] Society of Actuaries, 2013 Risks and Process of Retirement Survey Report

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