Managing your financial life is not just about money.

How long will I live?

This is the fourth article in the series. In this piece I will answer questions 5 and 6 of 32 very important questions people need to answer before retiring.

  1. How long will I live?

Crafting a retirement plan would be a whole lot easier if you knew the answer to this question.  The answer depends upon your age, your health, your genes, your socio-economic status, luck, and probably a few other factors that I can’t think of right now. The answer is who knows? But, when it comes to retirement planning, you have to make a guess.woman-bench-stand-by-blonde-157622

The Social Security Life Expectancy Tables (they ought to know) says that a 65 year old male has a 17.75 year life expectancy and the a 65 year old female has a 20.32 year life expectancy.  Those numbers are for the population in general, but are at least a starting point for your guess.  Your family history is probably the next place you look.

How long you live is probably the biggest variable in the success of a retirement plan.  If you live longer than planned, you may run out of money before you run out of time.  If you die before planned, you probably could have had some more fun.  If you guess conservatively and assume you live to 95 or 100, you might have to work to age 70 before retiring.  If you assume you will live to 80 you may be able to retire at 60.  If your guess is wrong by a lot, there will be consequences.  The answer to this question is unknown, but it is probably the most important assumption that you will make planning for retirement.  Please give this question some serious consideration… then place your bet!

  1. Am I living in my retirement home?

If the answer is no, then you have some work to do. Selling and buying a home are major financial events.  How much is your existing home worth… really?  Where will your retirement home be?  How much will it cost?  Will there be a mortgage involved? Will your living expenses go up or down in your retirement home. When crafting your retirement plan you need some really good numbers.  You need to do some serious research into these questions so that you have good data in your plan. Don’t guess on these things.

If the answer to this question is you are not sure, this could be a problem. If you are not sure, then you can only craft your retirement plan assuming that you stay in your existing home forever, because that is the only good data you have.  Then you must assume that if you do buy a retirement home after retirement, it will cost no more than the net proceeds you receive from selling your existing home.  I have a news flash for you.  That is almost never the case in my experience.  Most people want a smaller, better and thus more expensive retirement home, or what is the point in selling your existing home?

Finally, do not plan on selling your existing home and then buying a smaller, less expensive retirement home and having some money left over for retirement income. I have not yet met anyone who would be happy about doing that. Maybe you will be the exception.

If the answer is that you are living in your retirement home, you will have to wait until the next article my thoughts on that.

If you have a question for me, I can be reached at

The next article in this series answers the following questions: 7. If I am living in my retirement home, how much do I have to spend to get it ready for retirement? 8. What will I do with my other property?


Michael J. McNamara Ph.D., CFP®


*Any financial advice in this article is intended to be generic in nature. Readers should consult with their own financial advisors before implementing any advice or suggestions above.


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