Are we living longer?

Canadian pensioners are living almost three years longer than previously projected, suggested The Canadian Institute of Actuaries in research published last summer1. It found that a woman now aged 60 is expected to live to age 89, and a 60-year-old man is expected to live to 87. While these findings may help revise the standard mortality tables used for pension plan valuations, the prospect of living longer can challenge how we all save and invest for retirement. Here are a few ways in which longevity influences planning decisions: Will you have enough to sustain the lifestyle you want? Are you saving enough now to fund your desired lifestyle over a possible 20 to 25 years of retirement? You may want to re-evaluate your retirement savings goal for the future. And during retirement, there may be a need to boost your portfolio’s growth component, with a strategy to produce lifetime income. Will you ease into retirement? Since retirement may span a quarter-century, many Canadians are choosing to phase into their new retiree lifestyle and earn income during the first few years. You may plan to work part-time, consult, or launch a business venture. This could alter plans for how much you need to save today. Are you protected against health risks? An aging population means more Canadians may eventually require long-term care, whether in a residence or at home. To plan for this financially, you could purchase long-term care insurance, or self-insure by setting aside extra savings. Should you wait to give an inheritance? If it’s important for you to help out children or grandchildren, you might plan to give a gift while you’re still living, if you expect to still be enjoying retirement during their time of greatest need. We can help make sure your retirement savings plans take longevity risk into account, and include the right kind of investments to provide security. n 1. Canadian Institute of Actuaries, Canadian Pensioners Mortality, July 2013.