How long are you going to live?

I always used to plan for 20 to 30 years after retirement.

Why? Very few men in our family lived too long after they hung up their spikes. None made it to age 75.

Bad genes? Poor health habits? It could be all of the above. Nearly all of my grandmothers did much better.

However, according to the actuaries at Social Security, today’s 65-year-olds have roughly a 25 percent chance of living into their 90s, and about one in 10 will live to 100 or longer.

This puts a strain on Social Security. When it first sent out retirement benefits in 1940, the average life expectancy for a 65-year-old was 79. It was not designed to fund 30-year retirements.

Most retirees are frightfully underfunded.

A Vanguard study says that retirement savers aged 65 or older have average balances of just $197,000 in their workplace retirement accounts. IRA distributions, home or business sale proceeds, and pension and Social Security income may help them out in the first decade of retirement, but what about the decades that might follow?

Most retirees have one of three alternatives.

One, retire later.

Two, save and invest more and spend less.

Three, consult a financial professional about retirement planning rather than going it alone.

Retiring after age 70 could become the norm in 10 to 15 years.

Pair healthier seniors and new technologies, and you could see millions of septuagenarians working 40-hour weeks. Retiring at 75 could leave us with 10 fewer years of retirement to fund.

Retirement saving is not a top priority for many households, especially given today’s economic pressures.

That does not mean it can be ignored.

We used to save more than we do now: the U.S. personal saving rate routinely exceeded 7 percent until the mid-1990s. During the Great Recession, it reached 8.1 percent; in September 2017, it was down to 3.1 percent.

There are some sophisticated retirement projection tools on-line. Some pre-retirees may want to talk face-to-face with a personal adviser.

Planning retirement cash flow is somewhat complicated with many variables to consider and this sort of consultation is not free – but it may be worth every penny, just regarding offering insight as well as possibly steering pre-retirees away from retirement planning errors.

If enough seniors struggle to make ends meet (or if there is a national emergency of senior homelessness or indigence), we could see the federal government respond by boosting retirement benefits.

Cutting Social Security benefits would be unthinkable in such a crisis, so payroll tax (and the amount of income subject to it) could increase instead. The resulting inflows could potentially help Social Security’s balance sheet as well as its beneficiaries.

Assuming we need 30-plus years of retirement income is not unorthodox, merely pragmatic.

From that assumption, we can plan for our futures with an understanding of how much money we may need to live comfortably and pursue our dreams.

Tom and John Mills are registered investment advisers and certified financial planners. Reach them at 254-0155, MillsWealth.com. Securities offered through LPL Financial, Member FINRA/SIPC. Investment advice offered through Strategic Wealth Advisors Group (SWAG), a registered investment adviser.

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