Once you have a better estimate of your remaining years, you can tweak your money plan for a longer life – Image Ocean Finance
Make Your Money Last
By Saghir Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the ummah will benefit from this effort through greater financial empowerment, enabling the community to live securely with dignity and fulfill their religious and moral obligations towards charitable activities)
How many more years will you live? It's not an idle question. Twenty-eight percent of Americans 50 and older underestimate their life expectancy by five years or more, according to a recent study by the Society of Actuaries. The finding is even more pronounced among women; nearly a third significantly miscalculate how many more years they can reasonably expect to live.
This pessimism about the years left to you has a downside: You could run out of money. Underestimating longevity, money managers say, can be a big mistake, leading you to sock away too little in savings or to choose to retire before you're financially stable. "Your life expectancy is the foundation of your planning.
Many recent headlines have warned of decreasing life expectancies in the US, due to COVID-19 and other societal issues, but these reports don't necessarily apply to you; they're averages for the entire population.
To get a fresh, relatively objective sense of your longevity, many tools are available. Search online for "life expectancy calculator" and you can get an estimate from several sources, each with its own formula.
Whatever number (or numbers) you end up with, financial planners adding a few years to it to account for a wild card: medical advances that could keep you going even longer.
Adjusting Your Plan
Once you have a better estimate of your remaining years, you can tweak your money plan for a longer life.
1 Make a spending plan that goes the distance. A realistic plan will reduce the odds that you'll run out of money. Use one or more retirement-income calculators to get an idea about whether your spending is sustainable , based on factors such as your longevity expectations, your savings, your Social Security benefit and your spending. Find good web-based tools; search online for the company name and "retirement-income calculator."
Coming up short? Look for ways to you end up with, financial planners-cut back. For many older Americans, such as Donald D. Duncan of Savant that means giving your children and Wealth Management in Chicago-grandchildren more of your time not more of your money. In a recent CreditCards.com poll, nearly 80 percent of parents who helped adult kids financially during the pandemic said they gave money they would have used to improve their own financial situation.
2 Review your health coverage yearly. If your Medicare coverage includes a Part D drug plan or a Medicare Advantage plan, don't put this insurance on autopilot. Plans, costs and coverage can change, as can your health needs. When open enrolment begins every year in mid-October, review your coverage, with the help of your accountant attorney, the rest of all is financial advisers.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, or does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
