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FINANCIAL ADVISORS used to suggest a 20-year planning horizon for retirement. Now, most advisors say to plan for a 30-year retirement. From my own experience, I believe 40 years should be the norm, and 50 years isn’t unreasonable.
If we plan for the longest possible life expectancy, we’ll almost always die with money left over. That’s far better than the alternative—living longer than planned and running out of money.
People who live to 100 are called centenarians. The term supercentenarian describes those who are at least 110. While not common, supercentenarians are becoming less rare.
My grandmother, Hazel Blecha, passed away a month before reaching age 112. She was born in November 1894 and passed away in October 2006, so she lived in three centuries—the 19th, 20th and 21st.
The Gerontology Research Group used to keep a list of verified supercentenarians. Unfortunately, its list is no longer updated regularly. When my grandmother turned 109, we contacted the site and asked if we should start the verification process. We were told to wait. Most people who reach 109 don’t make it to 110.
Nonetheless, we started the verification process a few months before she turned 110. The group wanted documentation of her birth date, her change of name when she married and her current identity.
The county where she was born didn’t have birth records going back to the 1800s. Her father, however, published the local newspaper. When she was born, he made sure there was a birth announcement in the paper. We also had her marriage certificate to verify her name change and her passport to verify her current identity.
The Gerontology Research Group checks this data carefully because some older people exaggerate their age. This is nothing new.
The Gerontology Research Group estimates there are 300 to 450 living supercentenarians worldwide, with 60 to 80 of them in the U.S.
My grandparents grew up in Severy, Kansas, a tiny town in the southeastern part of the state. They both graduated from Kansas State University in Manhattan, Kansas. My grandfather spent his entire career at K-State with its agricultural extension service, helping to educate farmers. When he retired, they moved to Deer Trail, a small town in eastern Colorado.
My grandmother worked hard, but never outside the home. In their 70s and 80s, my grandparents had a large garden that supplied our family with seemingly unlimited frozen and canned vegetables. My grandfather frequently played golf in retirement, though he played only nine holes. He also insisted on walking for the exercise it provided. He passed away at age 88.
My grandmother lived on her own until she was 100. She then moved in with my parents. Eventually, she moved to a nursing home. She was mentally competent until her last year. She never smoked or drank and was never overweight. She never took medicine or drugs. She refused to keep even aspirin in her home.
My grandparents lived modestly. Their home during retirement was left to them by my grandmother’s parents. The kitchen had plywood cabinets with plywood doors. Most of us would not want such cabinets today, but they satisfied their needs. They spent money on what they valued, which was travel.
Before the age of convenient transoceanic airplane travel, they went by cruise ship to Australia, Egypt, Greece and many other destinations. They spent several winters in Hawaii during the 1950s. It took them a week to get there—by train from Colorado to the West Coast and then by ship to Hawaii.
Some people hope to run out of money the day they die. By that measure, my grandmother Hazel was a failure. When she passed away at nearly 112, she left a $1 million estate.
Larry Sayler is the only person with a Wharton MBA who also graduated from Ringling Bros. and Barnum & Bailey’s Clown College. Earlier in his career, he served as CFO for three manufacturing and service organizations. For 16 years before his retirement, Larry taught accounting at a small Christian college in the Midwest. His brother Kenyon also writes for HumbleDollar. Check out Larry’s earlier articles.
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Hey Larry.
neat info. I love reading about them. Hazel is my great great aunt. Gloria is my great grandmother. I was at Hazel’s 100 B-Day in Deer Trail. I recall hearing about Hazel playing solitaire on a computer while she was in the nursing home.
Another good article, Larry! Thanks. My father, a retired pastor, recently died at the age of 101. It was amazing to watch how he lived life to the fullest for most of his years. His frugal habits and careful saving, despite never earning a large salary, enabled a comfortable retirement until the end of his life.
Thanks, Don. Many people 90+ or even 100+ seem to live very satisfactory lives. That’s encouraging.
I have always had financial plans run out to age 100, although sometimes that took a bit of persuading. Now I’m 75 that’s “only” 25 years, but I’m not sure I actually want to make it that long. Definitely depends on my health. My mother announced at age 90 that she had lived long enough, and died in her sleep the following year, wish I thought I could do that.
If you believe that retirees should plan for 40 to 50 years I assume that as a financial advisor you would STRONGLY recommend that they purchase LTC insurance? LTC insurance is not a very popular product here because of the premium inflation rate of this product(unless you buy the correct type of LTC product). Your anecdotal examples of centenarians are impressive but I suspect are not very representative of the reality of people reaching that kind of age level.
Interesting article. It actually caused me to go look at SSA.gov actuarial table. Looking at the latest data (2019) actually surprised me that the likelihood of an American my age living until 90+ was actually higher than I would have guessed. Thanks. This was a useful exercise. Here’s the link: Actuarial Life Table (ssa.gov)
Thanks for sharing. It would be nice to have all the monte carlo simulations run for 40 years instead of 30 to see how sequence of returns risk affects things (especially now for those who are close to retirement in what looks like very bad scenario with high inflation, rising interest rates and long-term excess government spending ).
Vanguard’s Retirement Nestegg Calculator is useful. You can vary the number of years you want your savings to last (50 year maximum), your withdrawal rate, and your stock, bond, and cash allocation.
https://retirementplans.vanguard.com/VGApp/pe/pubeducation/calculators/RetirementNestEggCalc.jsf
My mother lived until one month after her 107th birthday. Because she and my dad had lived well but frugally and bought U.S. savings bonds with money from their farm, Mom was able to support herself on Social Security and cashing in bonds. She’d often ask “have I run out of money?” and I could say truthfully that she had not. She came close – when she passed away only $1,500 was left in her account. We distributed that among her grandkids.
Longevity can be a great thing – with reasonable health and financial resources.
I read about planning for 30 years and often to age 95 in the same sentence. Seems like that only makes sense if you are retiring at 65. Then you read all those who say they plan to retire at 60 or even 55. Interesting math.