Regardless of how young or old you are, now is the time to make sure you can afford to live into your hundreds — because you may very well do so …

According to researchers at Stanford University’s Center on Longevity, “one in every two five-year-olds alive right now will live to 100. Not to mention, more than kindergarteners can anticipate a triple-digit life span. Propelled by aging baby boomers and continued medical advances, the number of centenarians worldwide is expected to increase eightfold.”

So while the idea of living to 110 and 120 may seem far-fetched, it’s not. And neither is the possibility that many retirees won’t have enough money to see them through all those additional years. Which I write about in the first part of this two-part series of blog posts on longevity. Here’s a link to it, in case you want to refresh your memory — “Living longer and longer is one thing — having the means to do so is another.”

That post was all about the lifestyle considerations and plans we have to think about and put in place as we look ahead. Today’s about the here and now. A very different here and now than we expect.

So different that some of our lifestyle and retirement thinking and plans may have to be revisited, although how we get there doesn’t. It does bear noting that as far back as 2017, CBC was reporting that “saving $1 million for a comfortable retirement used to be a lofty goal, but now, it may not be enough.”

If you’re thinking it’s too late by then, most of Warren Buffett’s wealth came after he turned 65. And don’t overlook the role compounding played in Buffett’s success as an investor. He’s living proof of the power of compounding. So take a moment and think about what thirty more years of compounding could do for you. Ten or twenty more years of earning more — without your doing anything. Just keep your money invested. That’s a lot of money.

There is more to it, though, and what you can’t lose sight of is where successful investors have always started — and that’s with good, sound, strategic, ongoing financial planning. Which, I have to tell you has probably never been more important than it is now:

• as we face the prospect of living so much longer
• as we face the need to save more, invest more, add more growth to our wealth, ensure we have access to enough guaranteed monthly income to cover our day-to-day essential expenses which will, in all likelihood, go up as we keep aging and our needs keep changing
• as we face the fact that retirement planning strategies, pensions, RRIFS and even investment choices, products and current thinking have all been based on us living to 90 — not into our hundreds.

 

We may very well have to at least consider working longer, well into our 70s in fact, according to Laura Carstenson, PhD.

Carstensen, a professor of psychology at Stanford University and founding director of the Stanford Center on Longevity writes in her report, “The New Map of Life”,‘employers will come to recognize that people want to work well into their 70s and create policies and new approaches to accommodate a productive and engaged aging workforce.’”

She’s not alone in her thinking, either.

A 2019 Edward Jones and Age Wave collaboration, together with The Harris Poll and a series of follow-up tracking studies in 2021 and 2022 revealed, among other things, that “financial foresight is central to retirement preparation. Retirees on average began saving for retirement at 37 but say they should have started nearly a decade earlier.”

In February 2024, Frederick Vettese wrote in The Globe and Mail, how “putting off retirement for just a little while can significantly boost your retirement income.” There’s no law that says you have to start claiming your CPP pension and OAS at 65 — and not doing so can definitely make a positive difference.

All our lives we’ve been conditioned to believe that 65’s the magic number, when we get to retire, and live the dream.

When it comes to asset allocation, for decades we’ve followed the 60/40 rule, which is the most basic principle of investing. But with people living longer, this may now need a re-think, it may be time to give conventional wisdom and “the way it’s always been done,” a second look. Given the very real possibility of living so much longer, is it still right to keep retirement savings in low-risk investments?

It all depends on how much money you think you’ll need and when you want to retire — other than that used-to-be 65 philosophy — which brings us right back to the importance of financial planning. And, of course, your tolerance for risk.

Regardless of your age, does the prospect of living longer change either your perception of risk, what concerns you or what, if anything you might change if you could turn back time?

I can’t provide you with the answers to these critically important questions. Only you, your financial planner and the advisors and experts you work with know what best suits your immediate and long term needs and objectives, what works with your current investment strategy and portfolio and what you are and aren’t comfortable with.

I can provide you with some food for thought, which is my aim for this blog post. And that includes looking into whether or not there are any new longevity-focused investments currently available. Here’s what I found after a relatively brief search:

If you haven’t already read it, on May 31 the Globe and Mail published an interesting and informative article, written by Gillian Anderson on longevity-focused investments — “Longevity products have role for aging Canadians but adoption has been slow.”

There is no question that living longer is going to impact our finances, which is a big deal and one not to be taken lightly. But with ongoing, strategic financial planning, considered decisions and adjustments when necessary, careful monitoring and practical and realistic assessments — and good health — we can look forward to a longer, more purposeful life, more years to live our dreams and fulfill our goals than we ever imagined possible.

And that’s what I wish for you.

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