Healthy retirement
The longevity questions you should ask your financial planner
Only one-third of men correctly estimated how long a 60-year-old man in the U.S. could expect to live, according to a 2022 TIAA Institute survey. And fewer than half of women got it right for a 60-year-old woman.
Advisers call this — understanding how long you’ll live in your retirement years — longevity literacy. It’s a crucial part of your retirement strategy, and it’s important that you and your financial professional are on the same page.
Here are the questions to ask your adviser.
1 What are you using as my life expectancy?
No one can know when they’re going to die, but your health and family history can help your planner make a good guess.
“I’ve started, a few years ago, asking a lot of health questions of my clients,” says Mitchell Kraus, a certified financial planner in Santa Monica, California.
Planners often work with software that can model what will happen to your finances if you die at different ages, based on the assumptions you’re making.
2 What should I be doing about long-term care?
The big wild card in your financial plan is whether (and how long) you’ll need long-term care. There’s a reasonable chance you’ll need some kind of support, so talk to your planner about the best way to prepare.
You may want to plan to purchase long-term care insurance at some point, or a hybrid policy that combines permanent life insurance with a long-term care rider. Or it may be better to self-insure and plan to use savings for long-term care needs if insurance is too expensive.
3 How should I prepare to pay for health care needs?
You may have seen Fidelity’s statistic that a 65-year-old couple today may need $315,000 to pay for health care expenses in retirement. Making the right health care decisions once you’re eligible for Medicare can help.
“I think if people have Medicare and a Medicare Supplement, I’ve actually found they have a pretty good chunk of their health care paid for,” says Clark Randall, a CFP in Dallas.
This is because Medicare Supplement Insurance, otherwise known as Medigap, can pay for most out-of-pocket costs associated with your Medicare plan. As long as you can pay the premiums, many of your costs may be covered if you have a big health event.