Living to 100: As It Becomes Common, Money Regrets Follow

We're on track for a population with 600,000 folks over the age of 100 by 2050. Yet almost nobody is planning for it financially.

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The longevity revolution is a blessing. We shouldn’t view it any other way. Medical breakthroughs and new understanding of health and wellness have lengthened life expectancy at birth in the U.S. from 49 years in 1900 to 78 years today, and this extra time can be both happy and productive. But these bonus years may also be filled with regrets, a Merrill Lynch survey suggests.

The likelihood of living to 78 only hints at the full story. If you are already 65, odds are you’ll live to 84. A 65-year-old couple has a 31% chance of at least one of them making it to 95. And get this: The Census Bureau estimates that the number living to 100 rose by a factor of 35 from 2,300 in 1950 to 80,000 in 2010. Centenarians will exceed 600,000 by 2050.

(MORE: Three Ways to Know if You Can Retire)

The Merrill Lynch Affluent Insights Survey found that 58% have a positive view of living to 100. They see longevity as a bonus, not as a pro-longed period of feebleness. That’s good. In my book The Power Years (with Ken Dychtwald), we describe these bonus years (roughly spanning ages 65 to 85) as “middlescence,” a new period of productivity and self-discovery that previous generations did not enjoy.

But to get the most of these middlescent years your money has to last, and that is where the regrets come into play. Despite all the evidence that we are living longer, most people still do not account for the extra years in their financial plan. In the Merrill survey, 75% said they would approach money management differently if they were certain they would live to 100. They said they would:

  • Work at least part-time during retirement (39%).
  • Re-evaluate their savings and investment strategies (37%).
  • Invest in a lifetime income product, like an annuity (32%).
  • Contribute more to a 401(k) or other retirement savings vehicle (32%).
  • Purchase long-term care insurance (29%).
  • Retire closer to 85 than 65 (25%).

These days almost no one targets a certain age for retirement. In the survey, just 14% of those over 50 said they had a date in mind. For a great many, retirement will be a function of opportunity (when they are confident they have sufficient resources) or necessity (their health or the health of a family member dictates leaving the office).

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Most would prefer to work longer than to cut their lifestyle. But if they had to cut costs, here’s how they would do it:

  • Trim day-to-day expenses (38%).
  • Purchase fewer personal luxuries (35%).
  • Limit budgets for vacations (32%).
  • Keep the same car longer (27%).
  • Leave less of an inheritance (25%).
  • Downsize their home (24%).

Here’s the thing: most folks would benefit from living like this anyway. Cutting costs is one of the things you can control. Meanwhile, a lot of folks are going to live to 100. So why not just plan to work longer, save more and secure a guaranteed income stream for life?  In the survey, 73% viewed retirement as time for a second act. Yet they are not doing what it takes to realize that vision.

MORE: I Hope I Die Before I Have to Live with Old People

LIST: 10 Smarter Ways to Reach Your Retirement Goals

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