Baby Boomer Survival Guide, Second Edition: Live, Prosper, and Thrive in Your Retirement

By Barbara Rockefeller and Nick J. Tate

Fully updated and revised survival guide – including up-to-date changes due to life with Covid-19 – for Baby Boomer generation entering retirement!

Baby Boomer Survival Guide, Second Edition: Live, Prosper, and Thrive in Your Retirement is the premier roadmap to retirement for anyone focused on financial security. This is a comprehensive, easy-to-understand guide that covers all the significant financial, healthcare, and lifestyle-related considerations today's Baby Boomer generation needs to know. 

This essential happiness handbook to financial & health security includes key topics:

• How to Live a Long, Happy, Healthy Life
• Expanding Your Interests, Hobbies, Social Network, Community Involvement & Quality Time with Family
• Where to Live & Where to Travel
• What to Do With Your Extra Years
• Strategies for Not Outliving Your Savings
• Financial Planning and Investing: Rules for Success
• Taking Advantage of the Trump Tax Cuts
• Homeownership vs. “Real Estate” & Renting vs. Buying
• WORKING in Retirement
• Social Security Optimization Strategies
• Having a Medicare Game Plan
• Key Questions and Answers to Long-Term Care
• Why You Should Think About Inheritance
• Wills, Trusts & Taking Care of Your Family

A little planning and foresight can go a long way toward making sure your hopes and ideals for retirement don’t collide with harsh economic, financial, and health-related realities. Baby Boomer Survival Guide will give you the wherewithal to make your retirement the rich-est, most fulfilling chapter in the book of your life — for yourself and your loved ones.

• Language: English
• Publisher: Humanix Books
• Release date: Mar 30, 2021
• ISBN: 9781630061562

Book preview

BABY BOOMER

Survival Guide

Live, Prosper, and Thrive in Your Retirement

Revised and Updated Second Edition

BABY BOOMER

Survival Guide

Live, Prosper, and Thrive in Your Retirement

Revised and Updated Second Edition

BARBARA ROCKEFELLER & NICK J. TATE

www.humanixbooks.com

Boca Raton, FL, USA

Baby Boomer Survival Guide, Revised and Updated Second Edition

© 2021 Humanix Books

All rights reserved

No part of this book may be reproduced or transmitted in any form or by any means, electronic or mechanical, including photocopying, recording, or by any other information storage and retrieval system, without written permission from the publisher.

Interior: Ben Davis

For information, contact:

Humanix Books

P.O. Box 20989

West Palm Beach, FL 33416

USA

www.humanixbooks.com

[e-mail]

Humanix Books is a division of Humanix Publishing LLC. Its trademark, consisting of the words Humanix Books is registered in the US Patent and Trademark Office and in other countries.

ISBN (Paperback) 978-1-63006-155-5

ISBN (E-book) 978-1-63006-156-2

Contents

Introduction

PART I — Financial Decisions

by Barbara Rockefeller

Chapter 1

Getting Started: Taking Stock

You are Not Alone

Baby Boomer Worries

Will You Outlive Your Savings?

Taking Stock8

How Much Do You Need?

The Monster Under the Bed: Long-Term Care

Homelessness

The Solution

Calculating the Cost of Retirement

Planning

Chapter 2

Retirement Age

Longevity

What to Do With Your Extra Years

Retiring Early Is Dangerous to Your Health

Who Do You Want to Become?

Working After Retirement

Changing Jobs Before Retirement

Starting Your Own Business after Retirement

Why Starting a New Business Is a Great Idea

Employment Resources

Chapter 3

Social Security

The Real Social Security Problem

Final Debunking

How it Works in Practice

How Your Social Security Benefit Is Calculated

The Best Age to Apply

Monthly Benefits at Retirement Age

Cumulative Benefits by Retirement Start Age

The Breakeven

Spousal Benefit

If You Are Single

Cost-of-Living Adjustments (COLA)

Social Security Optimization Strategies

62/70 Strategy

File and Suspend

Start-Over Strategy

Working and Social Security

Taxing Social Security

Social Security Disability Benefit Claims on the Rise

Other Aspects of Social Security

Chapter 4

A Place to Call Home in Your Golden Years

Homeownership vs. Real Estate

How to Think About Changing Homes During and After the Pandemic

Cashing Out

Reverse Mortgages

How Do Reverse Mortgages Work?

A Family Affair

Downsizing

Managing the Real Estate Broker

Renting vs. Buying

Boomer Mobility

On Retiring Abroad

So You’re Determined to Take The Plunge

Real Estate/Housing

Healthcare

Crime and Violence

Chapter 5

Inheritance

Why Do We Have Inheritance and Estate Taxes?

Federal Estate Tax

Portability

Here’s How It Works

State Inheritance Taxes

The Gift Tax and Exemptions

Why You Should Think About Inheritance

Chapter 6

Wills and Trusts

Why Do People Fail to Prepare for the Inevitable?

Dying Without a Will

The Essence of a Will

Writing a Will

Changing and Revoking Your Will

Contesting a Will

Do You Need a Living Trust, Too?

What Is a Revocable Living Trust?

Advantages of a Living Trust

Disadvantages of a Living Trust

Special Trust Cases

Generation-Skipping Trusts (GST)

Credit Shelter Trust (CST)

Charitable Remainder Trusts

Private Foundations

Fiduciary Duty

Chapter 7

Trading and Investing: Rules for Success

Rule 1: Achieve Basic Financial Literacy

Rule 2: It’s Not Savings Unless It’s a Savings Account

Rule 3: Only Greater Risk Boosts Return

Rule 4: Leverage Boosts Return but Increases Risk

Rule 5: Seeking Risk On Purpose

Rule 6: Avoid Catastrophic Losses, Part 1

Rule 7: Avoid Catastrophic Losses, Part 2

Rule 8: Learn to Look at Charts

Rule 9: Conventional Wisdom is (Probably) Bunk

Rule 10: Options

Rule 11: Avoid Fraud and Scams

Avoiding Bad Investments: Advice from Credit Analysts

Chapter 8

Financial Planning

Hire an Expert or Do-It-Yourself?

Planning vs. Advising

Credentials

Do Your Homework

Retirement Investment Mentors

Retirement Coaches

Do It Yourself

Components of a Retirement Plan

Measuring Outgo

Measuring Income

Putting Income and Outgo Together

The 4% Rule

PART II — Heath Considerations

by Nick J. Tate

Chapter 9

The Long and Winding Road to Long-Term Care

7 Key Questions and Answers to Long-Term Care

No. 1: What Is Long-Term Care?

No. 2: Is Such Care Pricey?

No. 3: How Much Do Long-Term Insurance Policies Cost?

No. 4: Is Insurance The Only Option?

No. 5: Won’t Medicare Pay for Some Long-Term Care?

No. 6: What about Medicaid?

No 7: How Can You Tell if You’re Likely to Need Long-Term Care?

Chapter 10

The Silver Tsunami

The Affordable Care Act

The Impact of COVID-19 on the US Healthcare System

The Impact of COVID-19 on Medicare

What does COVID-19 Mean in the Long Run?

Coming up with a Medicare Game Plan

No. 1: Who Is Covered by Medicare?

No. 2: What Are the Primary Elements of Medicare?

No. 3: Do You Even Need Medicare?

No. 4: Should You Stick With Your Current Medicare Plan?

No. 5: What Type of Plan Works Best for You and Your Budget?

No. 6: Do You Qualify for a Discount?

No. 7: When Can You Sign Up?

No. 8: Are There Certain Rules and Restrictions for First-Time Enrollees?

No. 9: What If You Don’t Like Your Plan?

No. 10: What About Prescription Drug Coverage

No. 11: What Is Supplemental Medicare Coverage and Do You Need It?

No. 12: Is a Stand-Alone Medicare Part D Drug Plan Right For You?

No. 13: Medicare Scams And How To Avoid Them

No. 14: Watch out for COVID-19 Health Scams

Chapter 11

Thinking Through the Unthinkable

No. 1: What Is a Living Will?

No. 2: What Is a Healthcare Proxy?

No. 3: Can Your Medical POA Be a Non-Relative?

No. 4: What Treatments Would You Want — and Not Want?

No. 5: Why Do You Need to Put It in Writing?

No. 6: Should You Update Your Advance Directives Periodically?

No. 7: Can Your Healthcare-Related Documents Be Invalidated or Challenged as Faulty?

No. 8: Can Your Doctor Refuse Any of Your Advance Directives?

No. 9: Are There Other Documents You Might Need to Be Sure Your Wishes Are Carried Out After You’re Gone?

No. 10: How Can You Help an Older Parent or Relative Make Similar Plans?

The Stanford Letter

End-of-Life Planning During the Pandemic

Chapter 12

The Lifelong Journey to Health

Data from the Experts

Some Hopeful Signs

Prescriptions for Health

Screening Recommendations for Men and Women of All Ages

Avoid Tobacco

Limit Alcohol

Maintain a Healthy Weight

Eat Healthy

Get Moving

The Goldilocks Effect for Heart Rate

Get Regular Physical Exams

Do Something to Manage Stress and Get a Good Night’s Sleep

Screening Recommendations: As You Age

Men: 40 and Older

Women: 40 and Older

Both sexes: 40 and Older

Men: 50 to 65

Women: 50 to 65

Both sexes: 50 to 65

Men and Women: Over 65

Beyond the Big C

Minding Your Mental Health

5 Rules to Live By

No 1: Exercise

No 2: Weight Control

No 3: Mental Challenges

No 4: Social Interactions

No 5: Cut Down on Stress

Beware of Bogus Cancer Cures

Will You Live to 100?

Move more, eat less

Banish stress

Rest up

Follow your bliss

Learn new things

Chapter 13

The Affordable Care Act: What Baby Boomers Need to Know

No. 1: Do the ACA’s Affordable Healthcare Exchanges Still Exist?

No. 2: Can You Still Be Penalized If You Don’t Have Insurance?

No. 3: Can You Still Get a Federal Health Insurance Subsidy?

No. 4: What Kinds of Plans Are Offered?

No. 5: Are the premiums increasing?

No. 6: Will Coverage Differ From Past Insurance Policies?

No. 7: What Does the Insurance Application Process Involve?

No. 8: What About Small Businesses?

No. 9: What Are the Smartest Ways to Budget and Plan for Healthcare Costs in Retirement?

Explore Health Savings Accounts

Consider Long-Term Care Insurance

Resolve to Stay Healthy

Manage Any Chronic Conditions You Have

Become a Comparison Health Shopper

Itemize Medical Deductions on Your Taxes

Save on Drug Costs

Investigate Insurance Rebates

Look into Employer Wellness Programs

Other Savings Options

Healthcare Spending Rising

Avoiding ACA Scams

Beware ACA Scams

Additional Tips

Chapter 14

Quality of Life

by Barbara Rockefeller and Nick J. Tate

Longevity

You Are What You Eat

Cue the Spirits

One Size Does Not Fit All

Best Places to Live

Staying Connected

Volunteer

Groups and clubs

Don’t Neglect Your Physical Health

Dating over 50

Adopt a pet

Time Well-Spent

Living Long and Healthy

Lessons from Centenarians

Strive for Balance

Afterword

Appendix A:

Unbiased Resources

State Health Insurance Assistance Programs (SHIP) by State

Patient Advocates, Insurance Ombudsmen by State

Appendix B:

Assisted-Living Facilities and Nursing Homes

Terms You Should Know

How to Choose an Assisted-Living Facility

Compare Assisted Living to Home Care

Research and Visit Prospective Facilities

Calculate Costs

How to Choose a Senior Care Facility or Services

How to Choose a Nursing Home

Do Your Homework

Visit Multiple Times

Ask Questions about What You See

Additional Resources for Long-Term Care

Index

Introduction

BABY BOOMERS ARE THE single biggest demographic group in the US today, about 73 million in a population of 331 million. This is about 22%, a big jump from 12.4% in 2000. About 10,000 boomers reach the retirement age of 65 years every day. TV and magazine ads feature good-looking seniors playing golf, swimming and riding bikes, as though spending your golden years like this is the norm and the final chapter in the American dream.

Yet fewer than one in four will have saved enough money for retirement by age 65. Those over 60 have a median net worth of only $221,200. Net worth is the value of your assets minus your debt. So, for example, you may own a house worth $250,000 but if the mortgage remaining to be paid is $200,000, the contribution of the house to your net worth is only $50,000. This is why so many people continue to work beyond age 65: they have to. Although, of course, many stay at work because they love their work.

For those who are able to save enough to retire comfortably, there is another consideration: Federal health statistics show that Americans are living longer than at any other time in history, largely due to major advances in the diagnosis and treatment of many health conditions that once killed people in their 50s and 60s. The current life expectancy in the US is 78.9 years, but the ranks of those over 85 is the fastest-growing segment of the US population. Here’s the key boomer problem: only a small minority have saved enough money and have the net worth to pay for those extra years. Life expectancy in 1950 was 66 for men and 71 for women. We are still trying to wrap our minds around the prospect of living into our 80s.

But there is also a downside to this decidedly good news: Older Americans are also living with more chronic, costly health problems that accompany them into retirement — cancer, heart disease, diabetes, Alzheimer’s disease, etc. — compared to a generation ago. For nearly one in four seniors on Medicare, out-of-pocket medical expenses exhaust all of their assets and life savings in the final years and months of life.

As of 2020, the average 65-year-old couple faces $280,000 in medical bills throughout retirement, which is more than the average net worth of $221,200. As for whether medical bills are the immediate cause of bankruptcies among those over 65, the data is deeply politically divisive. Is it true that seniors are declaring bankruptcy for medical cost reasons? Yes, but figuring out exact numbers and percentages is well-nigh impossible (no matter what the politicians say), because those filing for bankruptcy are not required to state a single reason. Surveys show job loss and medical bills are the top two reasons for those declaring bankruptcy.

We can come at it from the side door, so to speak. According to a Federal Reserve study, only one in five Americans aged 75 or older were in debt in 1989, but by 2016, almost half were. Twelve percent of those filing for bankruptcy in 2016 were over age 65, compared with 2% in 1991.

Where does unpayable debt come from? Credit cards, which can be used to pay medical bills. The percentage of households headed by someone 65 and over with any debt increased from 41.5% in 1992 to 51.9% in 2010 to 60% in 2016. The median debt was $31,300 in 2016, more than double the amount in 2001. Also in 2016, 42% of households headed by someone 65 and over had credit card debt, and the median amount of debt had risen from $1,174 in 1992 to $2,500. For those over 75, 26% of households had credit card debt and the median also increased from $838 to $2,100. Clearly credit card companies are not using sensible actuarial measures for probability of repayment.

There is no doubt medical debt poses the biggest barrier to boomer’s financial health. According to the National Council on Aging, approximately 80% of older adults have at least one chronic disease. And a study in the Journal of General Internal Medicine revealed that out-of-pocket medical expenditures in the five years prior to an individual’s death totaled more than $38,000, leaving 1 in 4 seniors approaching bankruptcy (https://www.ncoa.org/economic-security/money-management/debt/senior-debt-facts/).

If these statistics aren’t enough to give you pause, consider the following:

• Medicare benefits are unsupportable at current levels and may need to be scaled back significantly to remain solvent, while Social Security taxes will have to be raised if benefits are not cut, something that is politically unacceptable today. Eligibility ages may have to be raised in one or both programs to 67 or even 70, according to experts. When Medicare was created in 1965, 19 million Americans were eligible. Since then, the number of people enrolled in Medicare has kept growing, tripling from 20 million in 1970 to 61 million in 2019. And it is projected to reach about 88 million in 30 years. In 2019, there were 56 million people in the U.S. age 65 and older, and that number is expected to increase by more than 50% by 2049.

• Seven in ten Americans 65 and older will one day require some form of long-term care in a residential facility, nursing home, adult day-care center, or in their own homes, according to the US Department of Health and Human Services. Yet only one in 12 have actually purchased long-term insurance or arranged for some other means to pay for it.

• Nearly half of Americans 85 and older will develop Alzheimer’s disease or dementia and require assisted medical and/or residential care, according to the Alzheimer’s Association. In many cases, adult children live in separate cities and are unable to help out with their parents’ needs.

In short, these demographic and economic trends add up to a burgeoning crisis of major proportions when it comes to retirement planning for many of the nation’s baby boomers. The greying generation that so revered youth and youth-culture is facing the prospect of a bleak future — one that gives a chilling new meaning to Pete Townsend’s famous quip: Hope I die before I get old.

But it doesn’t have to be this way. In fact, a little planning and foresight can go a long way toward making sure your hopes and ideals for retirement don’t collide with these harsh economic, financial, and health-related realities.

In essence, this is precisely why we’ve decided to produce this survival guide: to help you navigate your way to a fulfilling, active, and financially-secure future.

What you will learn in this book:

• Smart financial moves you can make now in terms of investment and savings — whether your retirement is months, years, or even decades away — to be sure your golden years are just that

• How to calculate how much you’d likely need to save for retirement based on current US life-expectancy projections and your lifestyle

• Tips for establishing a strong financial profile that will allow you to plan for any eventuality, including a catastrophic illness or unexpected monetary emergency

• What you can reasonably expect to receive in terms of Social Security benefits and other government assistance after you retire

• How to evaluate the best places to live in retirement, based on costs of living, crime, weather, and other quality-of-life factors

• Clear-eyed advice for handling estate planning, inheritances, wills, and trusts

• What the Patient Protection and Affordable Care Act (aka ObamaCare) will mean for you and your healthcare, and how to plan accordingly to take advantage of some new opportunities and minimize the financial risks the health law may present

• Practical tips for surviving the coming changes and challenges in Medicare, including how to pick a health plan, determining whether you need supplemental insurance, avoiding Medicare and other healthcare-related frauds and schemes, and strategies for maximizing your healthcare dollar

• A guide to choosing long-term insurance, nursing home care, assisted living facilities, and planning for the catastrophe no one sees coming: a serious medical emergency that can deplete your life savings

• A state-by-state list of patient-advocacy agencies and insurance ombudsmen to help with questions and complaints you may have about healthcare providers, insurers, or physicians

• How to craft detailed advance medical directives — including a living will — to make sure your wishes are carried out, should you become incapacitated and unable to speak for yourself

• An age-specific breakdown of recommended health-related screening tests that offer significant protection against cancer, heart disease, diabetes, dementia, Alzheimer’s disease, and other conditions

• The latest word from the nation’s leading doctors and anti-aging specialists on how boost your health (mentally and physically) and longevity, so that you are not merely surviving in retirement, but thriving in your golden years

• How the COVID-19 pandemic could affect your healthcare planning

In short, this book has been written to provide a handy, useful, and practical roadmap to retirement for baby boomers. It was designed specifically to allow you to expand — not limit — your interests, hobbies, social network, community involvement, career pursuits, and your personal goals in retirement.

It’s a cliché that all good stories have a happily-ever-after ending. But it is our sincere hope that what you find in this book gives you the wherewithal to make your retirement the richest, most fulfilling chapter in the book of your life — for yourself and your loved ones.

PART I

Financial Decisions

IN THIS CHAPTER YOU’LL DISCOVER

→ You Are Not Alone: Baby Boomer Worries

→ Will You Outlive Your Savings?

→ How Much Do You Need?

→ The Monster Under the Bed: Long-Term Care

→ The Solution to Running Short on Funds

→ Calculating the Cost of Retirement

→ Planning

1

Getting Started: Taking Stock

THE WORD SURVIVAL IN the title of this book may imply ordeals ahead for you in retirement. But while survival implies overcoming adversity, this is not your grandpa’s retirement. When your grandfather was 60, he was an old man; the baby boomer generation has a younger biological age than chronological age. We are staying more youthful for longer because of better nutrition, more advanced medical care, a cleaner environment, and less hazardous working conditions. We have more people in offices than digging ditches.

Accordingly, the average retirement age is rising, too. In the early 1990s it was 57, then by 2003 it rose to 59. By 2013, it was 63.9 years for men and 61.9 years for women. By 2019, the retirement age had crept up to 65 for men and 63 for women. Note that age 63 is considered early retirement by the Social Security Administration.

In many cases, the decision to retire is delayed because of financial insecurity, but for others, retirement is postponed because the boomer is healthy and happy enough in his job to want to keep working. Moreover, you’ll find that most boomers can’t imagine what they would do all day if they didn’t go to work. Not everyone plays golf. A large minority of boomers who were unhappy with their work are seeking their lifelong, dream career in retirement. Boomers intuitively know that retiring early means dying earlier, too.

Delaying retirement, and refusing to think about planning for retirement, is a characteristic of many baby boomers, who prefer to go with the flow and figure it out as they go. This ad hoc style was a hallmark of the 1960s in particular, when social and cultural norms were evolving very rapidly. Planning was for fuddy-duddies and definitely not cool. Why go through this effort when conditions will be wildly different in only a few years, anyway? This mindset left many baby boomers not knowing how to make a plan. But the fact remains that by the time you are 50, you need to start making a retirement plan if you want to enjoy the same or nearly the same standard of living after retirement — or better.

Retirement offers a chance at re-inventing yourself, perhaps with a dream job or at least a change in lifestyle. Where you live and with whom you spend your time are decisions that require some soul-searching. But whether you decide to retire early, change jobs, or die in harness, the biggest factors are your health and how much money you have or can earn. Not surprisingly, these two factors are not independent of one another. Wealthier people tend to be healthier people, and vice versa. You can be healthy and poor and unhealthy and rich, but on the whole, wealthy people take better care of their health than poorer people, not only because they can afford to, but also because being health conscious is a social norm among the wealthy. Everybody dies, of course, but at what age and under what circumstances does depend, to a great extent, on money.

The connection between health and money is a strong one. Between 2013 and 2016, 77.8% of those declaring bankruptcy named loss of income, including for medical disability, and 58.5% declared medical costs solely, as the reason for filing. In comparison, according to The Motley Fool, 45% named their mortgage cost. Most bankruptcies are filed by people between the ages of 45 and 54, but those over 65 make up 12.5% of the total overall. The same percentage, 12.5%, report rationing their prescribed medications for cost reasons.

So the paradox is that you need to be healthy to get or stay wealthy, and for many, the cost of healthcare prevents getting and staying healthy.

You are Not Alone

The so-called baby boomer generation, defined as those born post-World War II, from 1946 through 1964, numbers about 73 million, with another 10,000 per day reaching the age 65 benchmark and making the exact number a moving target. When the last census was taken in 2010, the oldest boomer had not even turned 65. In 2012, seniors made up about 14% of the population. By 2020, it was 22% (vs. the forecast in 2010 that it would be 19%), and by 2030, it will be even higher. The 2020 census may show some surprises; the 2010 census surprise was that those over 85 were the fastest growing demographic, higher than the birth rate.

Bottom line, you don’t have to have been an irresponsible kid in the ‘60’s to find age 65 breathing down your neck — and yourself unprepared. Almost everyone else in your age group is in the same pickle. You are going to live longer than you ever imagined and you are, in all likelihood, not financially or psychologically prepared for it.

Baby Boomer Worries

What do baby boomers worry about? At the top of the list is outliving one’s savings and becoming homeless. Really rich people (the top one percent of the population) don’t have this fear; if some calamity should befall their home, they can go to a swanky hotel or just buy another house.

Next on the list is becoming so ill that your insurance doesn’t cover medical costs, forcing you to use up all your savings just to stay alive. One of the biggest medical worries is falling prey to dementia or Alzheimer’s disease. Some research says older people fear losing their marbles more than they fear death.

Third is being cheated — by an insurance company, investment broker, a home improvement contractor, an e-mail scammer, or an unscrupulous relative who finagles your power of attorney and fritters away your savings. According to ConsumerAction.org, those who are 60 and older account for nearly one-third of fraud victims. Advice to avoid being defrauded is available from numerous places, including AARP (AARP.org/money/scams-fraud) and the North American Securities Administrators Association (nasaa.org/investor-education/fraud-center/). This topic is covered in more detail in Chapter 7.

Will You Outlive Your Savings?

Chances are the answer is yes.

Before getting to the money part, first you should calculate how long you are likely to live. Since the fear of outliving financial resources is the number one concern of baby boomers, and justifiably so, you’ll need to do some scenario-building of your own.

How much you need to have saved depends on how long you will live. Life expectancy is a tricky subject and if you do a broad survey of many websites, you will get a broad range of answers.

Many websites are glad to do the actuarial work for you (and try to sell you an annuity or something after you get the outcome). The government will do it for you on the most basic of information, birthdate and sex (https://www.ssa.gov/cgi-bin/longevity.cgi). Adding in health factors, race, marital status and some other data, you can get a more refined longevity forecast. For example, if you were a female born in September 1964, you can expect to live a total of 88.1 years or 29.9 more years, according to the SSA. Applying more factors such as education and marital status, as at https://www.blueprintincome.com/tools/life-expectancy-calculator-how-long-will-i-live/, your life expectancy is 90, or 36 more years. And for all we know, by the time you add another ten or twenty years to your age, science will have added to that. You may live to 100. If you want to retire in the next 10-15 years, that’s going to leave you with decades to find a way to support yourself.

You can get an even more refined life-expectancy estimate using the calculator at Gosset.Wharton.UPenn.edu/mortality/perl/CalcForm.html. The survey asks detailed questions about your height and weight, family medical history, current diet and exercise habits, whether you drive at the speed limit, and so on. The result is your additional life expectancy in years. You can also see how many extra years you will get by changing your behavior in one or more of the categories, like getting more exercise.

According to Social Security’s Office of the Chief Actuary, your life expectancy depends on how old you are today. A man turning 54 on April 1, 2020 can expect to live to age 84.0. A woman turning age 65 on April 1, 2020 can expect to live, on average, until age 86.5. And those are just averages. About one out of every three 65-year-olds today will live at least to age 90, and about one out of seven will live at least to age 95 (SSA.gov/OACT/population/longevity.html). The older you get, the likelier you are to live longer, by simply having avoided dying.

As of the 2010 census, those over 90 totaled 1.9 million, triple the number in 1980. We await the results of the 2020 census, but the number is expected to have kept rising, and those over 90 will represent 10% of the population by 2050, depending on the outcome of the COVID-19 pandemic, which is more lethal for those over 65.

That’s why you probably don’t want to consult the life expectancy tables at the Centers for Disease Control and Prevention (CDC). You can find them at cdc.gov/nchs/fastats/lifexpec.htm. We will not have a usable new set of tables until the pandemic has ended.

CASE EXAMPLE

Let’s say you are 60 to 65 and want to retire to an assisted-living apartment when you are 70. Your monthly income from a pension and Social Security is $3,500, and you have savings of $150,000. An apartment in a first-class, assisted-living facility in your state costs $4,500, and that’s before nursing and other specialized care that you might need later on. You would be using your savings ($1,000 per month) for the difference, giving you a maximum of 150 months (12.5 years) with the savings you have.

But your life expectancy is longer than 12.5 years. Besides, assisted-living costs will almost certainly be higher by the time you are ready to enter, while your pension and Social Security will go up by only a modest inflation adjustment, if at all. What happens when your savings runs out? You have to move to a less expensive facility — something that is no fun when you’re 82. Getting a job at 82 is pretty much off the table, too. Possible solutions include: (1) starting to save more right now toward your rainy-day fund; (2) buying an annuity or long-term care insurance now against the day your savings run out; or (3) reimagining your plan to include being cared for by a family member (if this is even a possibility).

These are just a couple of the many possible scenarios and a few of the many possible solutions. Perhaps you are among the minority whose situation is different from this one, but for most, these scenarios emphasize the following key points:

• You have only now begun to give consideration to your life expectancy.

• The probability is high that you do not have the financial resources, including savings, to last as long as you will live.

• You need to devise your own plan as soon as possible.

Taking Stock

Again, you are not alone. Baby boomers have not been savers and are delusional about their own savings being even remotely adequate for their expected longevity.

A study updated every year for the last 30 years by the Retirement Research Institute finds that a majority of respondents are confident they have enough savings for retirement. And while more and more respondents are starting to save, those savings are seriously inadequate. Only a tiny fraction, less than 5%, have savings over $100,000. About 25% have no savings at all (https://www.ebri.org/docs/default-source/rcs/2020-rcs/2020-rcs-summary-report.pdf?sfvrsn=84bc3d2f).

Actually, survey respondents talk big. They say they are saving more and confident they are doing the right things to be able to retire, but they disclose deep uncertainty when the surveyors ask the questions a different way. How many believe they will have enough money in retirement? 38%. How many think they have enough to pay for medical expenses? 28%. How many think they have enough to last their whole life? 27%. How many think they can afford to pay for long-term care? 15%.

A big drawback to saving for retirement is living beyond your means by using debt, including second mortgages and credit cards. Over 40% of retirees consider debt to be a problem in 2020, compared with 25% only the year before in 2019. And 70% of those still working admit debt is having a negative impact on their ability to save for retirement, including the ability to contribute to employer retirement plans.

The disconnects keep appearing in the survey results. A full 75% say they are confident they will have enough money in retirement, but 92% admit they will reply on Social Security as their major source of money, up from 85% in 1991. Both things cannot be true!

This is why 31% of retirees say they will be working for pay, compared to 17% in 1991 when the survey was begun. This means an ever-rising proportion of baby boomers are continuing to work past 65. The Bureau of Labor Statistics reports that the trend of the over-65’s staying in the workforce is rising. Some continue to work because they love it and gives them a sense of purpose, but some are working because they must, having failed to save.

How Much Do You Need?

How much money will you need? Don’t freak out when you read the results of a survey from the Retirement Research Institute.

Remember, it’s a survey of what a big number of people estimated they would need, not anyone’s actual worksheet and not a forecast. It’s still pretty scary. Even in the absence of much inflation over the past decade, survey respondents figured out they could need a whole lot more than they had been imagining — in 2016, 27% thought they would need a million dollars or more. Now it’s 39%. Equally telling, only 8% think they will be able to get by on $100,000 or less, and this is down from 12% in 2016.

If you are sitting on, say, $5000 in savings and a net worth of less than $100,000, meaning your house and car, you may get the urge to give up and throw the book at the wall. Don’t despair! You may not be able to get that million dollars in the working years you have left before retirement, but you can make the effort to repair the