Economics and Longevity -- Brave New World for Retirement Planning

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More Americans are retiring then ever before, with baby boomers swelling the ranks of the retirement generation. Practical mortality is on the drawing board and retirement planning is not just different -- it's radically different, requiring a whole new mind set.

8,000 to 10,000 baby boomers retire every day.  A 65-year old couple might easily expect one spouse to survive to age 92, with 25% of them living on to 97.   Traditional retirement plans do not often take into account the projected longevity of retired seniors, much less pre-retirees.

Ray Kurzweil, inventor, futurist, and current Director of Engineering at Google, predicts that by the late 2020's “humans will be able to eat as much junk food as they want because everyone will have a nanobot injected into their bodies that will provide all the necessary nutrients while simultaneously eliminating fat.”  As a result, humans will live far longer than ever expected.

Add to that increased longevity, two recent bear markets combined with historic lows in interest rates – and the result is unprecedented stress on retirement savings to tow an already taut line.  Since portfolios will need to last longer and withstand deeper market cycles, financial planners and clients alike will need to take a careful look at the totality of the situation to avoid being left in the lurch.

“Some current baby boomers will make it through… to enjoy practical immortality,” predicts Kurzweil matter-of-factly.  “Live long enough to live forever,” states the subtitle of his 2005 book, Fantastic Voyage.

“Building a practical portfolio that takes all of these factors into account, is critical to an investor’s future over the next three to five years,” says Coral Gables Financial Advisor, Luis Mendez. “For example, one of the strategies our firm uses to help protect against market declines is AssetLock™, a new technology that sounds an early alarm at market changes and keeps open daily communication between advisor and client.”

Programs like AssetLock™ could become mainstream as more and more baby boomers reach and exceed the average age of mortality. It’s because of these improvements to human longevity that the National Institute for Retirement Security (NIRS) has issued a warning. According to the NIRS website, “inaction on retirement policy is no longer an option.”

“AssetLock™ is only offered to select financial advisors,” Mendez explains, “and it has been embraced because we want our clients to go to sleep at night knowing that no matter how painful the markets can be tomorrow, there is an effective strategy in place to provide added peace of mind.  Living longer, and having to face volatile markets over time, should not be a constant worry.”

Mr. Kurzweil calculates that in less than 15 years, technology’s exponential advancement will add more than a year, every year, to the average senior’s anticipated life expectancy.  This means that retirement portfolios may need to generate 10-20 years of additional income.*

Should these changes come to pass, economics and demographics would certainly be on a collision course for today’s seniors. Getting an annual portfolio check-up may be as prudent as getting an annual medical one—because both retirement fund and health will face this brave new world together.

*The information presented is not intended to be a substitute for specific individualized advice.  It is suggested that specific issues are discussed with a qualified advisor.

Luis Mendez is the founder and CEO of Gables Financial Partners, a premier financial advisory firm who serves the needs of professionals, business owners, and their families for over a decade. Luis is an accomplished advisor and a distinguished Gulf War veteran of the United States Marine Corps., and member of the Financial Planning Association.

Investment Advisory Services offered through Retirement Wealth Advisors, (RWA) a Registered Investment Advisor. Gables Financial Partners and RWA are not affiliated. Investing involves risk including the potential loss of principal.

AssetLock™ is a portfolio-monitoring system that identifies a client’s maximum portfolio downside or loss and indicates that immediate action is required in order to limit losses per the clients pre-determined risk tolerance.

Contact Info:
Name: Luis Mendez
Email: Send Email
Organization: Gables Financial Partners
Phone: 305-709-0777
Website: http://www.gablesfinancialpartners.com

Release ID: 67249

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Name: Luis Mendez
Email: Send Email
Organization: Gables Financial Partners
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