5 Keys to Longevity Planning for Retirement

As the average lifespan continues to extend, longevity planning for retirement has become increasingly vital. This planning requires a strategic approach to work toward a comfortable and financially independent retirement. Here are the five keys to longevity planning that every pre-retiree must work toward.

1. Start early and consistently save

The time to start saving for retirement is now. The earlier one starts, the greater the chances of amassing a substantial nest egg due to compounding. Also, consistently saving is essential – this should be a standard item in one’s budget.

• Set a monthly savings goal and stick to it.
• Automate savings transfers to avoid the temptation of spending.
• Start saving for retirement as soon as earning income starts.

2. Invest appropriately

Investing is an essential part of longevity planning. A well-diversified portfolio can help manage risk and pursue long-term growth. Diversification does not ensure a profit or protect against loss in declining markets. It’s vital to select investment strategies that align with one’s risk tolerance and goals.

• Diversify investment portfolio to spread risk.
• Regularly review and adjust the investment portfolio.
• Consider purchasing an annuity
• Consider engaging with a financial professional to help guide investment decisions.

3. Plan for healthcare costs

Healthcare is expected to be one of the most significant expenses in retirement, and it’s crucial to plan accordingly.

• Estimate future healthcare costs and incorporate them into the longevity plan.
• Consider purchasing a long-term care insurance (LTCI) policy.

4. Understand Social Security benefits

Social Security benefits are likely to form a significant part of one’s retirement income. It’s crucial to understand how these systems work to maximize benefits.

• Be familiar with the rules and regulations surrounding Social Security benefits.
• Determine the optimal time to start taking benefits based on one’s individual circumstances.

5. Have a sustainable withdrawal strategy

How one withdraws from retirement accounts can significantly impact how long retirement savings last. Establish a sustainable withdrawal strategy that can weather market fluctuations and last throughout retirement.

• Consider using the 4% rule as a starting point for withdrawals.
• Regularly review and adjust the withdrawal strategy.
• Factor in taxes when deciding which accounts to withdraw from each year.

Longevity planning is a holistic approach to retirement planning that not only considers wealth accumulation but also healthcare costs, Social Security benefits, sustainable withdrawal strategies, and smart investments. As a final tip, consider consulting with a financial professional who can help you navigate these factors and more, as you prepare for a confident retirement.

SWG5777521-0726 This information is provided as general information and is not intended to be specific financial guidance. Before you make any decisions regarding your personal financial situation, you should consult a financial or tax professional to discuss your individual circumstances and objectives. An annuity is intended to be a long-term, tax-deferred retirement vehicle. Earnings are taxable as ordinary income when distributed, and if withdrawn before age 59½, may be subject to a 10% federal tax penalty. If the annuity will fund an IRA or other tax qualified plan, the tax deferral feature offers no additional value. Qualified distributions from a Roth IRA are generally excluded from gross income, but taxes and penalties may apply to non-qualified distributions. Consult a tax advisor for specific information. The source(s) used to prepare this material is/are believed to be true, accurate and reliable, but is/are not guaranteed.

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