- Many Americans aren’t fully understanding the financial and lifestyle implications of living longer lives.
- Most need help getting started with the appropriate action steps.
- Even taking a few steps now is better than doing nothing.
There’s a serious disconnect between Americans’ beliefs about their longevity and the wealth + health decisions they’re making today, according to a report from the Stanford Center on Longevity at Stanford University.
“Many Americans aren’t fully grasping the financial and lifestyle implications of living longer lives, and as a result, they’re not taking the steps they need to take now to prepare themselves for the distinct possibility of living a long time,” the Center announced. “Being fully informed about the implications of long life may help Americans make better decisions to build lifetime financial security, health, and fulfillment.”
The SCL report provides a series of action steps from its Sightlines Project focusing on healthy living, social engagement, and financial security. Many of the action steps are not costly, including eating five fruits and vegetables daily, getting sufficient sleep, moderate exercise, and having frequent interactions with friends.
But it’s important to recognize that many people aren’t able to take some of the steps alone. They often need the help and support of others such as family, employers, healthcare systems, financial professionals, and others.
The report found stakeholders who only provide facts and figures will have limited success. For more effective results, it’s important to combine facts and figures with motivation and inspiration.
“While many people may not be able to directly control all of the action steps identified in this brief, doing something is better than doing nothing. There is a great deal that people can do — steps identified in the Sightlines report — to ensure long and satisfying lives,” says Laura Carstensen, a psychology professor and the founding director of the SCL.
The report concludes, “Individuals will be in a better position to survive and thrive in the decades to come if they are healthy, have close family and friends to provide emotional support, are protected against common financial risks and have money in the bank and in their retirement plan.”
Talking to clients about their longevity
Financial professionals are in a unique position to help clients make the connection about living longer and the effect it has on their retirement goals. Try running through an example on an actuarial life expectancy calculator. In this case, a 45-year-old, nonsmoking woman in excellent health has a 57% chance of living to the age of 90. That means if she retires at 65, she should plan for at least 30 years of retirement living.
Or have a client log in to Social Security and see what they can actually expect to receive as a retirement benefit, based on their own income. Talk with them if they think they can live on that estimated amount, plus any pensions or 401(k) savings they might have. It can be a real eye-opener for many. This can often lead to other discussions about guaranteed lifetime income products so clients don’t have to worry about outliving their money.
Transamerica sponsored the Sightlines Project with the Stanford Center on Longevity, which studies the nature and development of the human life span and is dedicated to the well-being of people of all ages.
In addition to working with Stanford University, Transamerica supports the Transamerica Center for Retirement Studies® and works closely with the Massachusetts Institute of Technology’s (MIT) AgeLab, which strives to improve the quality of life of an aging population and caregivers.
Full results of Stanford’s groundbreaking Sightlines Project are online at: Sightlinesproject.Stanford.edu.
About Transamerica Center for Retirement Studies®
Transamerica Center for Retirement Studies® is a division of Transamerica Institute®, a nonprofit, private foundation. Transamerica Institute is funded by contributions from Transamerica Life Insurance Company and its affiliates and may receive funds from unaffiliated third parties. For more information, please visit www.transamericacenter.org
Things to Consider:
- Educate clients on the likelihood of their longevity.
- Combine facts and figures with motivation and inspiration.
- Encourage clients to try one or two action steps identified in the full report to improve their wealth + health in the months ahead.
Transamerica Resources, Inc. is an Aegon company and is affiliated with various companies which include, but are not limited to, insurance companies and broker dealers. Transamerica Resources, Inc. does not offer insurance products or securities. The information provided is for educational purposes only and should not be construed as insurance, securities, ERISA, tax, legal or financial advice or guidance. Please consult your personal independent advisors for answers to your specific questions.