Jeralean Talley of Inkster, Mich., became the third oldest living person in the world April 2, 2013, following the death of Maria Redaelli-Granoli of Italy. Talley was declared the oldest living person in the United States on March 21, 2013. Born on May 23, 1899, Talley will celebrate her 114th birthday next month. According to the U.S. Census Bureau, Talley is one of approximately 53,000 U.S. citizens age 100 and over (total as of 2010).
If we consider the possibility that Talley retired at age 65, she has spent nearly 50 years in retirement. In contrast, when the Social Security retirement age of 65 was enacted in 1935 (when Talley was just 33 years old), the average mortality age for a man was 64 – meaning half of American men weren’t expected to even live until retirement.
What do mortality tables tell us about today’s retirees? A 65-year-old person has a mortality age of 85, meaning half of men that age will die before age 85. For a couple age 65, there is a 50 percent chance one will live to age 92 and a 25 percent chance one will live to 97. Now take into consideration that mortality tables are based on the entire population. Those who receive above-average nutrition and health care increase their odds of joining Talley in the ranks of centenarians and even supercentarians – a person who is 100 or older.
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That health care, however, comes with a price tag: A 65-year-old couple who retired in 2012 would need an estimated $240,000 to cover medical expenses throughout retirement, according to the latest retiree health care costs estimate calculated by Fidelity Investments. A 2012 MetLife Market Survey showed that the average cost for a private nursing home room increased 3.8 percent from 2011 to 2012, to $90,520 a year or $248 a day. Even assisted living communities average costs increased 5.3 percent from 2011. Now imagine paying that rate for the next 50 years!
Ensuring you will have enough to fund your retirement – no matter how long it lasts – requires planning for accumulation, distribution and risk management, including the risk that your life lasts longer than your assets. It also requires periodic review of your plan, especially if you or your spouse experience changes in your health or, if you are still working, in your ability to earn income and accumulate assets. You may want to consider contacting a Certified Financial Planner to review your existing plan or to start planning today for those years between now and your 114th birthday!
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FINANCIAL FACTS
Rich Neighbors – One out of every 13 households in the United States has a net worth of at least $1 million not counting the value of the family’s primary residence (source: Census Bureau, Spectrem Group, BTN Research).
The Economy – The U.S. economy grew by 2.2 percent in 2012. In the past 50 years (i.e., 1963-2012), the U.S. economy has grown by an average of 3 percent per year. The U.S. economy has contracted in size seven years in the past 50 years, most recently in 2008 and 2009 (source: Commerce Department, BTN Research).
More Buyers Than Sellers – The number of existing homes for sale in the U.S. has been cut in half over the past six years. There were 3.805 million homes for sale as of Feb. 28, 2007, reducing to 1.940 million as of Feb. 28, 2013 (source: National Association of Realtors, BTN Research).
