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We are all interested in the subject of lifespan. What is the average life expectancy of men and women? Which factors influence the service life? What can I expect for my own life? Or, you might want to think about your health margins – that is, how long you will generally live in good health. How should you consider your potential health margin when creating your financial strategies?

To begin with, you should be aware of the gap between life and health time. Consider this: The average healthy life expectancy in the United States is only 68.5 years, according to World Bank data cited in the 2020 Edward Jones / Age Wave Four Pillars of the New Retirement study. This means that Americans spend an average of about 10 years in poor health, which is unfortunately more than most other developed countries.

Of course, each individual’s situation is unique, and many variables play a role when comparing life span / health duration: differences in projected life expectancy between women and men, family health history, environmental factors, etc. And there are certainly many people whose health status is essentially theirs Life span equals – that is, they enjoy a healthy, busy life until the end. But even the possibility that you might face less than ideal health for a decade or more into your retirement years should be cause for concern. The health problem in itself is worrying, but the threat to financial independence that comes with it preoccupies people. According to the Four Pillars study, 72% of retirees say one of their greatest fears is putting stress on their families.

Given these concerns, here are a few steps to consider, possibly with the help of a financial professional:

Investigate the care protection. The cost of a long-term care home stay can be exorbitant, and the services of a home carer are far from cheap. And retirees know it: their biggest financial concern, according to the four-pillar study, is paying for health care costs, including long-term care costs. So you might want to try some type of grooming protection – and the younger you are to buy this protection, the cheaper it is usually.

Evaluate your investment mix. Even with Medicare and Medicare supplement plans, you are likely to face significant out-of-pocket healthcare costs during your retirement years. In order to be able to settle these bills, you need sufficient liquidity in your financial accounts. As a result, you may need to evaluate and possibly adjust your investment mix to ensure that you have adequate funds in liquid, low-risk vehicles. These types of securities don’t offer much growth potential, but they do offer more capital stability. You won’t want to give up all growth vehicles, however – you need to stay one step ahead of inflation even in retirement.

Create a sustainable payout ratio. Also, to allay your concerns about funding your health span, you need to make sure you don’t take too much money out of your investment portfolio every year, especially in the early years of your retirement.

If you could look into the future, you would know exactly where your life span intersects with your health. However, since that certainty is unattainable, you should be prepared for whatever comes your way.

Jennifer Barrett (AAMS) is a local financial advisor to Edward Jones.

225-612-0413 | [email protected]

Edward Jones. Member of SIPC.

Edward Jones, his employees and financial advisors are not estate planners and cannot provide tax or legal advice. You should consult your estate planning attorney or qualified tax advisor regarding your situation.

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