Worried You Will Live Too Long?
Most women will agree that living longer is a blessing if, of course, we keep our health and have the financial means to live life to the fullest without becoming a burden to our family. The statistics behind rising life expectancies paint a clear picture of how important a retirement income strategy can be –– a strategy that provides guaranteed income for life regardless of how long you live.
Life expectancy rose rapidly in the twentieth century due to improvements in public health, nutrition and medicine. It’s likely that life expectancy of the most developed countries will slowly advance and then reach a peak in the range of the mid-80s in age.
Women almost always have higher life expectancies than men. Currently, the worldwide life expectancy for males is 62.7 years, and for females life expectancy is 66 years. Newly released publications from the Centers for Disease Control have updates on the health of Americans. The average life expectancy of American women has gone beyond 80 years and that for American men to 75 years.
The results of two surveys by the Society of Actuaries show that pre-retirees and retirees misunderstand the likelihood of living to older ages and the need for planning to do so. Over 40% of pre-retirees and retirees underestimated population average life expectancy. Only about 25% of respondents had addressed longevity risk to the extent of having purchased an annuity that provides guaranteed income for life.
One powerful option to help you take control of your life and secure your future is purchasing an annuity. Women, Money and Power helps fill in knowledge gaps and builds dialogue between women about the importance of planning for the future. We are experts who can show you how to:
- eliminate market losses,
- enjoy tax deferred portfolio growth,
- protect your principal, and
- generate retirement income you can’t outlive.
Another benefit of purchasing an annuity is that you no longer have to pay federal income tax on an annuity’s proceeds if you use those proceeds to pay for long-term-care coverage. In regular long-term-care insurance policies, payments are forfeited to insurance companies even if services aren’t utilized. But with an annuity, unspent funds belong solely to the account holder and can eventually be withdrawn. These funds may also pass to beneficiaries in the event of death. In addition, if you’re too ill to qualify for a regular long-term-care insurance policy, you might have an easier time getting coverage through a long-term-care annuity because there are fewer hoops to jump through.
As a woman facing a longer life expectancy, you will also want to consider the economic impact this could have on your family. Most of us do not want our children to have to pay for our day-to-day living expenses, especially if long-term-care is needed. The loss of control would be devastating. Another consideration is that most us will want to leave a legacy to our heirs. A fixed index annuity can help pass your wealth on to the next generation.
To discuss whether a fixed index annuity may be an appropriate solution for you, contact us today, and let us do the work of navigating through the many companies and products that are out there to find the best options for you.
Cathy DeWitt Dunn of DeWitt & Dunn, LLC, is the driving force behind Women Money & Power. With decades of experience in the financial services industry, Cathy has dedicated her practice to educating clients on how to take maximum advantage of financial solutions that are not available in traditional brokerage houses. Cathy is proud to be on the forefront of innovative financial solutions for the individual investor.