By Russ Hill, Executive Chairman, Halbert Hargrove
Are you financially prepared to be a centenarian?
The vast majority of us are not. But we should be.
According to research from the Stanford Center on Longevity, where I serve as Chairman of the Advisory Council, “Demographers estimate that by 2050, reaching the age of 100 will be routine, continuing a remarkable upward trend in life expectancy, which doubled between 1900 and 2000 in the U.S. as a result of reductions in infant mortality, advances in sanitation, medicine, and the widespread implementation of public education.”
Yes. You, your children, and their children are highly likely to live well into your 90s and perhaps even reach the age of 100. While this is an exciting prospect, there are implications for your financial planning strategies.
Indeed, financial planning for longevity must take into account an additional 20-25 years of life for you and your loved ones. Fortunately, a financial advisor’s job—I’d argue, their core responsibility—is to help you rethink getting older and all the reasons to be optimistic about it.
It’s time to shift our mindset.
The Mindset Shift: Retirement is the Next Phase, Not the Endpoint
Wealth must be regularly and consistently replenished. Human capital is the largest source of wealth for most people, so continuing to work and learn as you grow older is likely essential. The great news is that the three elements critical to sustaining a longer life all work harmoniously: education, health, and work. Continuing to learn throughout life helps replenish our human capital and wealth while maintaining those crucial social relationships.
People are living and working longer, and there’s a healthy amount of variety in what they choose to do with that time. A 2023 Pew Research Center study found that almost double the number of Americans aged 65 and older were employed than 35 years ago.
Retirement is now a new phase of life, not the endpoint. Yet today’s traditional retirement models are outdated. Incorporating resiliency and adaptability in financial planning is critical. Plans will need to be refreshed more frequently, perhaps multiple years in a row. In an effort to ensure accuracy, you’ll need to have deeper conversations with your advisor about your retirement planning for an extended lifespan.
Consider what an ideal retirement looks like beyond finances, how you see your career evolving over the next few decades, and what role continued education or part-time work plays in your future. Choosing a practical financial planner who can balance risk with longevity-focused asset allocation is essential for sustaining your financial health over time. As they assess your current health, they should address rising healthcare costs and longevity insurance options, how stable your income is, and your interest in exploring phased retirement, side businesses, and passive income strategies.
Preparing Your Finances for Longer Life Spans
Studies like Stanford’s offer valuable information on how aging affects financial decision-making and can help you make more informed long-term choices for your future.
You must adapt your financial strategy to these new longevity trends. Seek financial professionals who will craft plans that account for longer life expectancies to help determine sustainable income and adaptable investment strategies.
Understand that things will undoubtedly continue to change. As people live longer, financial needs evolve, affecting broader industries. Be prepared for changes in healthcare costs, social security payments, and more.
Working with financial advisors with longevity expertise who understand the complexities of extended life spans can provide you with tailored advice that goes beyond traditional financial planning and is designed to adapt to the evolving financial landscape.
Embrace the Longevity Mindset
It’s always been essential to view financial planning holistically, but now, our increasing lifespan means that integrating your career, health, and lifestyle is even more critical. With decades more of life ahead of you, embracing new career changes or adventures is an exciting prospect.
If your advisor isn’t embracing the longevity mindset in their practice, it’s time to find one who will. Contact Halbert Hargrove today to inquire about the longevity of your financial plan.
Disclosure:
Halbert Hargrove Global Advisors, LLC (“HH”) is an SEC registered investment adviser located in Long Beach, California. Registration does not imply a certain level of skill or training. Additional information about HH, including our registration status, fees, and services can be found at www.halberthargrove.com. This blog is provided for informational purposes only and should not be construed as personalized investment advice. It should not be construed as a solicitation to offer personal securities transactions or provide personalized investment advice. The information provided does not constitute any legal, tax or accounting advice. We recommend that you seek the advice of a qualified attorney and accountant. All opinions or views reflect the judgment of the author as of the publication date and are subject to change without notice. All information presented herein is considered to be accurate at the time of writing, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted.
