Retirement 2035 & beyond Part 1 of 3

What do you imagine for your retirement?

The possibilities are almost endless.

Your retirement may include:

 traveling to far-flung destinations

indulging in your favorite hobbies

enjoying unhurried time with friends and family

devoting more time to volunteering

or maybe even starting your own business —perhaps one you’ve always dreamed about but never had the time or money to launch.

Whether you are beginning a career, changing jobs, or preparing to retire, it is never a bad time to start planning your retirement.

What you probably don’t imagine is continuing to work longer than you wish or curtailing your retirement activities simply because you don’t have enough money to support the lifestyle you envision.

Planning for retirement means looking into your future.

A successful retirement begins with envisioning a rewarding, healthy, and responsible lifestyle – one that’s personalized for your needs.

Create a mental picture of what you want to be doing when you retire, write it down!

The simple act of writing your goals down on paper is an effective way to refine and crystallize your retirement objectives.

A few good questions to think about when you do this:

 What would make a perfect week for you?

What would you like to do during each season of an ideal year?

What day-to-day activities would motivate your mind, maintain your health, and help build relationships in your community?

There are important realities to consider as you consider your retirement.

One of the most important is the ability to afford quality health care, including long-term care. An estimated four out of every 10 people turning age 65 will use a nursing home at some point in their lives, and many will need home care and other related services.

What’s more, according to the National Center for Policy Analysis (NCPA), older Americans currently spend an average of 17% of their income on health care. By 2030, that average is expected to rise to close to 24%.

Another way to look at rising health care costs is by looking at how much of your Social Security benefits that they will account for.

In 2017, senior citizens spent an amount equal to 33% of their Social Security benefits on health care.

By 2050, that amount is expected to almost DOUBLE, to 66%.

Not only are healthcare costs increasing, but people are also living longer. 

A growing focus on health and fitness, the availability of excellent medical care, and ongoing scientific advancements afford today’s retirees an opportunity to stay healthier and live longer than ever before.

In fact, today’s retiree is likely to live 20 or more years after retiring.

That means your retirement savings will have to last longer than ever before.

It also means that a greater portion of your accumulated savings may eventually be needed for long-term care or medical expenses.

Did you know that a 65-year-old man has a 40% chance of living beyond age 85?

Also, if a husband and wife are both age 65, there’s a 72% chance that one spouse will live beyond age 85. *

And then there is inflation …

A dollar today will likely be worth less at retirement because of inflation. Since everyday items get more expensive over time, you need to plan for future price increases when saving for retirement.

While it is difficult to predict inflation rates, even a 3.2% rate of inflation (just below the historical average of 3.43%) can have a significant impact on purchasing power and on your future standard of living.

Consider how the cost of a new home has risen over the years. A new home cost an average of just $143,000 in 1991. After plateauing between 2017 and 2019, house prices in the United States saw an increase in 2020 and 2021. The average sales price of a new home in 2020 was 389,400 U.S. dollars and in 2021, it reached 408,800 U.S. dollars.

Inflation has had the same type of impact over the years on the cost of a gallon of gas and even a gallon of milk.

In part 2 we'll discuss how today’s generations are turning many previous assumptions upside down and what you can do.