Longevity Blog - 5 Steps to Smart Financial Longevity Planning

Hey Gen X—Time to Stop Retirement Planning and Start Smart Financial Longevity Planning

If you were born between 1965 and 1981, you belong to Generation X. The oldest members of your generation are now turning 60, and it's time to rethink your financial future.

What We Know About Gen X Longevity

The good news? You have a high likelihood of living a long life. The average life expectancy is 85, and many of you will reach 100.

Your generation has also benefited from an era of remarkable innovation in technology, medicine, and daily life.

The bad news? The cost of everything has skyrocketed. While this reflects economic growth, it also poses significant financial challenges.

• In 1965, the median household income in the U.S. was just $6,900 per year.
• The average home price was $21,000. If you bought a home for that amount in 1965 and held onto it for 60 years, it would now be worth approximately $202,000.
• The cost of living will continue to rise throughout your retirement.

Adding to the challenge, only 15% of Gen X will retire with a guaranteed pension. The majority—85% of employees—lack pensions due to corporate shifts toward defined contribution plans after the ERISA Act of 1974. Today, only a few professions still offer robust pensions, including the military, nursing, utility workers, teachers, state and local government employees, and unions.

For everyone else, the path is clear: you must save aggressively to secure your future.

The 5 Key Steps to Smart Financial Longevity Planning

These principles are explored in-depth in my upcoming book, Smart Financial Longevity Planning, launching in February 2025.

1. Keep Working From 60 to 70 (If You Can)

These years are critical for accumulating savings and maximizing financial security:

• If you contribute just $25,000 annually to your retirement savings, it could grow to $570,000 at average market rates over 10 years.
• At 67, your full retirement age, you can claim Social Security without penalties, regardless of how much you earn.
• If you take $4,100 per month in Social Security for three years (from 67 to 70), you’ll accumulate $200,000 extra.
• By waiting until age 70, your monthly Social Security income increases to $5,100, with an additional $200,000 in savings that can benefit your family.

2. Plan Where and How You Will Live for the Next 30+ Years

Smart longevity planning includes considering your future living arrangements:

• Buy Your Dream Home Early – Prices are likely to rise, so securing your home now can be a smart financial move.
• Choose a Community That Suits Your Lifestyle – Whether it’s a golf course, oceanfront, or mountain retreat, pick a place aligned with your vision.
• Invest in an Additional Dwelling Unit (ADU) – Living near family can provide financial and emotional benefits.
• Plan to Age in Place – Modify your current home to accommodate future needs, ensuring comfort and accessibility.

3. Get Your Legal and Financial Affairs in Order

At 60, it’s time to solidify your legal and financial plans:

• Estate planning changes as you transition from a young family phase to a longevity-focused strategy.
• Ensure your wills, trusts, powers of attorney, and healthcare directives are up to date.
• Build your Smart Financial Longevity Planning team with trusted professionals to guide you.

4. Secure Guaranteed Lifetime Income

At age 60, consider locking in guaranteed lifetime income for when you stop working:

• Lifetime income annuities can protect against market volatility and provide reliable cash flow.
• Secure a lifetime income stream that covers all fixed expenses, allowing flexibility for discretionary spending.
• Rates locked in today won’t decrease even if interest rates drop in the future.

5. Review and Optimize Your Insurance Coverage

Now is the time to reassess all your insurance policies:

• Life Insurance – Ensure it aligns with your current needs.
• Health Insurance – Confirm comprehensive coverage, including Medicare planning.
• Long-Term Care Insurance – Lock in coverage now while rates are still reasonable.
• Liability Insurance – Protect assets from unforeseen legal issues.
• Home & Auto Policies – Adjust as necessary to meet new risk factors.

Some insurance policies originally purchased for raising children may now be unnecessary. Redirect those funds toward Smart Financial Longevity Planning to address future needs.

Final Thoughts: Smart Financial Longevity Planning Is the Future

Retirement planning is outdated. Gen X must shift toward Smart Financial Longevity Planning to account for longer lifespans, rising costs, and the disappearance of pensions. By taking proactive steps now, you can maximize savings, secure guaranteed income, and create a sustainable lifestyle for decades to come.

For more insights, stay tuned for my new book launching in February 2025!