What's Happening?
A recent study by Corebridge Financial, titled 'Living and Funding Longer Lives,' emphasizes the importance of longevity planning as people increasingly expect to live to 100 years or more. The study suggests that individuals should prepare for extended retirements that could last three decades or longer. Bryan Pinsky, president of individual retirement and life insurance at Corebridge Financial, highlights the need for a strategic financial plan that addresses the risks associated with living longer. The study also points out the interplay between health and wealth, noting that poor health can deplete financial resources, while financial stress can negatively impact health. Annuities are recommended as a way to provide guaranteed lifetime income,
supplementing Social Security and helping individuals feel more secure about their financial future.
Why It's Important?
The findings of the Corebridge Financial study are significant as they underscore the growing need for comprehensive retirement planning in the face of increasing life expectancies. As more Americans anticipate living longer, the financial industry must adapt to provide solutions that ensure financial security throughout extended retirements. This shift in planning is crucial for both individuals and financial advisors, as it involves not only managing financial resources but also addressing healthcare costs, lifestyle desires, and caregiving expectations. The study's emphasis on annuities as a source of guaranteed income highlights a potential strategy for mitigating the fear of outliving one's savings, a concern shared by many retirees.
What's Next?
Financial professionals are encouraged to engage clients in longevity planning discussions, focusing on personal and family histories of longevity and the benefits of living longer. Advisors are also urged to conduct retirement savings check-ups and help clients develop comprehensive retirement income strategies that include understanding Social Security and Medicare options. As the population ages, the financial industry may see increased demand for products and services that address the unique challenges of extended retirements, potentially leading to innovations in retirement planning and financial products.
