Your Easy Living Retirement Blueprint
The rich are different.
At least when it comes to thinking how long they will live.
A new survey from UBS Wealth Management found that about half of millionaires expect to live to 100 years of age.
The amount of optimism varies by where you live. Europeans — Germans, Italians, and Swiss — are the most optimistic.
But with all that said, health data shows all of us are living a lot longer.
The World Health Organization notes the average global life expectancy has increased to a record 71.4 years.
The Journal of the American Medical Association reports that, “from 2001 to 2014, the richest Americans gained about five years of longevity, while life expectancy for the poor didn’t budge.”
In the U.S., someone turning 65 years old today is expected to live into their 80s or even 90s. That means you will need 30+ years of retirement income.
With the average Social Security check today at $1,369 a month, that isn’t going to cut it. You need to do more.
The affluent are doing exactly that:
“Nine in ten investors are taking steps in response to increasing life expectancy, such as adjusting spending habits and financial plans, and allocating their wealth to long-term investments,” the UBS report states.
But how are the rich doing it?
Many of them, despite their wealth still follow these simple, but crucial steps that you can take too.
Live Large, Spend Small: Living well doesn’t mean spending lavishly. Spending your savings too rapidly will haunt you in your later years.
Use conservative withdrawal rates to make sure your savings lasts. I recommend you withdraw no more than 4% to 5% of your saving in a year.
Healthcare/Long Term Care Costs: Longer life spans also means higher medical costs. According to Fidelity, a 65-year old married couple retiring in 2017 will spend a whopping $275,000 during their on healthcare.
And that doesn’t include long-term care or nursing home expenses!
According to the U.S. Department of Health and Human Services, about 70% of those aged 65 and older will require some type of long-term care service at an assisted living facility or nursing home.
A 2017 Cost of Care Survey from Genworth found that the average private-pay cost for a semi-private room in a nursing home is about $85,776 a year.
Assisted living facilities average $45,000 per year, and home healthcare services are $132 a day.
If you have less than $100,000 in retirement savings, you should consider an 844 Long Term Care plan.
One of my good friends David Phillips, has prepared a free, detailed report on 844 LTC plans that I highly recommend you read here.
Invest For Growth: The surest way to run out of money is to invest too conservatively. In fact, conservative investments can be just as dangerous as overly aggressive ones for retirees because of the erosive effects of inflation.
Inflation eats away at your purchasing power and affects your retirement income by increasing the future costs of goods and services.
What I recommend is a balance between income and growth. The best vehicle to meet that dual goal is with quality dividend-paying stocks, like the ones I’ve been recommending my Infinite Income service.
Odds are you and I are going to spend a long time living out our golden years.
Using the three tips I’ve outlined today will help you ensure yours is prosperous and fulfilling.
Here’s to growing your wealth,
Chief Income Expert, Mike Burnick’s Wealth Watch