How to plan for long life

(NYTIMES) – Ms Dani Rizzo and Mr Adam Hoyt are diligently saving for retirement. They are putting away money each month and monitoring their investments. They are looking ahead, as a couple, and trying to be socially responsible.

She is 33, and he is 32, but they wonder: How many years of life could they be looking at, and saving for?

So, with their financial planner, they ran an online longevity calculator. The prediction, based on their family histories, health and lifestyle, popped up: Mr Hoyt could very well live to 92, Ms Rizzo to 94.

While the couple are saving regularly in their individual retirement accounts, they are also envisioning “what we want our retirement to look like”, Ms Rizzo said. “We have no plans for kids, but travel will be a big piece of what we do.”

They also care about investing responsibly, investing in companies that promote racial and gender equity and divesting from fossil fuels.

They are working with Mr James Brewer, a certified financial planner with Envision Wealth Planning in Chicago.

While focusing on their savings goals, Mr Brewer also helped them embrace life planning, which asks: Besides not outliving your money, how can you make your life meaningful in retirement, which could last three decades or more?

In the US, the growth in the 100-plus age group is partly a result of better medical care and a combination of improved lifestyle factors. This cohort has expanded 44 per cent since 2000.

Eighty per cent of centenarians are women. And in about 40 years, the number of people 100 and older will be six times as high as it is now, according to the Census Bureau.

What enhances longevity? College degrees and continuing education are correlated with it, a Yale and University of Alabama-Birmingham study found.

Having a degree does not guarantee you a longer life, but one’s longevity may be augmented by factors such as enlightened self-care, better medical attention and activity later in life.

Genetics also plays a significant role. The landmark New England Centenarian Study, begun in 1995, identified genetic markers associated with those living past 100.

The researchers, led by Dr Thomas Perls, a professor of medicine and geriatrics at Boston University School of Medicine, found that these markers overall were 61 per cent accurate in predicting who hits 100.

“The genetic component is a factor in 40 to 50 per cent of people who make it to 100, and 70 per cent for those reaching 106. But it’s like winning the lottery. Only one in 5,000 Americans makes it to the century mark,” Dr Perls said.

An enlightened attitude and deliberate mental, social and physical activity during retirement also matter. That means continuing to learn new things, staying involved in the community and working to some degree.

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Activity is critically important, said Mr Mitch Anthony, a consultant in Rochester, Minnesota, and author of Life Centered Financial Planning.

Mr Anthony, who trains financial planners in life planning, has found that people who embrace what he calls a “new retirementality” do best when they remain socially and mentally vibrant.

In developing a core life-planning philosophy, he said, you will have to ponder answers to three questions: What do you want out of life? What gives you joy? And how do you pay for it?

Purpose and meaning throughout life are important, many researchers agree, although it is hard to pin down how they improve longevity.

A study published in 2013 suggests that these factors may offer a mental and possibly physical breakwater for life’s many travails.

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“Having purpose in life may motivate reframing stressful situations to deal with them more productively, thereby facilitating recovery from stress and trauma,” the researchers found.

When estimating how long one could live and need money, it helps to run some possible outcomes.

Most advisers who offer comprehensive financial planning do this, because it is critical to see how long your money will last, given a host of factors. You will also need to review some long-term estate planning, Mr Brewer said.

“A lot can happen over 10 decades, especially over the last three,” he said. “It’s important to review your wealth transfer and personal wishes annually. While you may still be alive, many of your friends or desired beneficiaries may no longer be alive.”

In recent years, estimating longevity and planning for it have become more sophisticated.

The LivingTo100 longevity calculator, developed by Dr Perls, is a good place to start to get a rough estimate of your lifespan and what you can do to improve your odds of living longer, should you want to go down that path.

Living a long life still requires a solid nest egg and the ability to withstand any number of financial and other shocks.

For now, Mr Hoyt and Ms Rizzo are following the longevity planning script. “We see ourselves maintaining strong connections with our community, friends and family, laughing every day,” Ms Rizzo said. “Not ‘acting our age’, trying new experiences, big and small – and always learning.”

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