It won’t be long before 105 is the new 75. Are you prepared?
by Alan Friedman
This is not silliness, neither is it far-fetched — it’s true.
From the World Economic Forum comes this: “Two-thirds of the world’s population will be 65 years and above by 2050, according to the UN, and the projection for the global ageing economy is already estimated to reach $27 billion by 2025 — there will be more people ageing and living longer.”
Too far in the future for you? Well, as of February 2021 there were already “more than half a million people aged 100 or older globally.”
Can you afford to live that long?
Is “longevity” built into your financial plan and your portfolio? How long is your current “nest egg” projected to last? What happens if you live to 100 or more? Will you outlive your money?
And what about “how” you’ll live. Would you want to age at home? Will you be able to? Will your mental and physical health and mobility allow it, will your savings? Have you given any thought to that, to the quality of life you’d want and the quality of life you’d have?
I ask, because there are already incredible advances in technology that are allowing people to age safely at home, and there are also amazing advances in science, bio medicine and precision medicine that will make age-related diseases a thing of the past. More than finding new and better ways of treating diseases that shorten our lives, we’ll be able to prevent them.
In fact there’s an entire industry dedicated to keeping us alive — and well — and ageing safely at home. It’s global, and this “longevity economy” is projected to be the “largest industry in human history.” Click on the link and read the article, you’ll be amazed, awed and inspired when you see how far Canada — and the world, have already come and all the exciting developments coming next — and coming soon.
All well and good, but these innovations won’t improve your financial health and wellbeing
A 2015 Angus Reid online survey revealed that nearly half of the retired Canadians surveyed — from all walks of life, including those who have retirement savings and investments — are worried about their money lasting their lifetimes. It is a sentiment shared by roughly three-quarters of those not yet retired.
Are you one of them?
Running out of money too early is such a concern a Canadian mutual fund company is addressing the issue with a new Longevity Pension Fund, which they introduced to the market in 2021. It is the world’s first income-for-life mutual fund to provide lifetime income to Canadian retirees.
What else can you do?
You could consider working longer, even if it’s part time. It has health benefits as well as financial benefits. Be honest with yourself. If you’re not serious about saving enough and if you’re spending more than you’re saving, now is the time to make some really meaningful changes. You should also make sure you’re putting enough money aside to cover long-term care costs, which will inevitably keep going up — and the longer you live, the more you’ll need.
And most important, spend time with your Investment Advisor and financial planner. Review your retirement and investment portfolio — it is critically important to ensure it’s maximized for growth and protection — because once you’re retired, what you’ve got is all you’ve got. Woulda, shoulda, coulda won’t help you.
Now is the time to ask yourself, “how long will my money last?”
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Alan Friedman is an Investment Advisor with CIBC Wood Gundy in Toronto. The views of Alan Friedman do not necessarily reflect those of CIBC World Markets Inc. CIBC Wood Gundy is a division of CIBC World Markets Inc., a subsidiary of CIBC and a Member of the Canadian Investor Protection Fund and Investment Regulatory Organization of Canada. If you are currently a CIBC Wood Gundy client please contact your Investment Advisor. Clients are advised to seek advice regarding their particular circumstances from their personal tax and legal advisors. Commissions, trailing commissions, management fees and expenses all may be associated with mutual fund investments. Please read the prospectus before investing. Mutual funds are not guaranteed. Their values change frequently and past performance may not be repeated.