Longevity Planning 101: Client’s are living longer – now what?

Underestimation often has grave consequences. Teams that underestimate their opponent often lose and people who underestimate travel times often end up late. How long you live, on the other hand, is nothing to underestimate, even though it’s likely that your client does. Imagine estimating that your client will live to 80 only to have them go a full decade (or more) beyond that? What does that look like in terms of care, medicine and most importantly, money?

Your clients are planning on a shorter lifespan

It can’t be stressed enough that people are living longer than they ever have before and that it will have a major impact on your clients’ finances. Your clients are likely underestimating how long they will live and that could put them in serious trouble down the road.

The question then becomes: what now? Just because your clients are underestimating how long they will need their assets to last, doesn’t mean that you have to. Every meeting with them is an opportunity to stress the importance of taking years on to their original estimation. There’s plenty of resources, data and observations out there to use to your advantage in pushing them to add some extra cushioning to their retirement funds.

Living Longer

Failing to Plan for Longevity: A Grave Mistake

Arguably the most important thing that you can do for them is push them to purchase some form of long-term care insurance. Long term care, though partially covered by medicare for a certain number of days, still has the potential to bankrupt your clients. The combination of living longer and underestimating your life span is a recipe for financial ruin. 

If your clients have already purchased or are willing to purchase long-term care, you can relax, but only a little bit. Paying those premiums will still have to come from somewhere and it’s likely that they’re drawing from a different bucket of their retirement funds to pay for it. Keeping all aspects of retirement, long-term care, and inheritance in balance is a tricky game, but it’s what you’re paid to do.

Put yourself in the shoes of your client and take an empathetic look at how their life might change for the worse if they fail to plan for longevity. It’s your job to overestimate their life span and the amount of assets they might need to thrive, even if they view things on a shorter timeline.