Reverse Mortgages and Increasing Life Expectancy

"TIME, where did it go? It seems like yesterday when it all began.”

Fran Feltowitz
Reflecting on her marriage of 60 years

When planning for retirement, you want to insure that you have enough money to cover your living expenses for every year you are alive. The problem is that you have no way of knowing how long you will actually live.

According to the U.S. Census Bureau, in 1900 there were only 3.1 million people aged 65 and older. Today, that number is 35 million and growing rapidly.
So, how long are you going to live?

The average life expectancy in the U.S. is over 77 and that figure is expected to creep up to 85 by 2065, according to Ronald Lee, an economic demographer at the University of California, Berkeley.

However, these life expectancy numbers are misleading. Life expectancy numbers are averaged for all deaths regardless of age – so they include infant and other young person deaths – making the average deceivingly young.

More useful statistics include these facts:
• In 2001, life expectancy for people age 65 was 83 years old.
• In 2001, for those age 75, life expectancy was 86.5, a whole decade higher that the general life expectancy of 77.
• According to the New England Centurion Study, people ages 100 and older are the fastest-growing segment of the United States population, and this pattern is expected to continue.
• There is a 50 percent chance that at least one partner from a couple in their 60s will live to the age of 95.

It is important to understand that you have a good chance of living a long time – to 85 or longer. Good health and good genes contribute to a long life. The average person is born with a set of genes that would allow them to live to 85 years of age. People who take good care of themselves may add as many as 10 quality years to that. People who smoke, are overweight or fail to practice preventive medicine may subtract substantial years from their lives.

Our longer life spans mean that we must have vastly more retirement assets than previous generations. The good news is that there are actions you can take and financial insurance products to help you insure you do not outlive your assets – no matter how long you live.

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