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Use some of that long life for retirement planning

Updated: May 3, 2013 12:14PM

Originally published: August 19, 2004

My dog, Trouble, died this week. He was 15 years old, a good life span for a Yorkie. And, like all people who are owned by their dogs, I thought he was very special. He came to the office with me every day, except for recent months when he preferred to sleep in my bedroom closet. He often traveled the country with me. And he had great instincts for knowing when I needed to be comforted.

His death -- along with some research I’ve been doing for my book on retirement -- reminded me again about the subject of mortality.

We never want to think about it for our pets, much less for our parents and ourselves. Yet the subject of longevity is the key to all financial planning -- and the most uncertain. We know that science has made it possible to live longer. But how much longer?

According to the Social Security actuarial tables, if you’re a baby boomer -- age 50 this year -- you can expect to live to age 82 if you’re a woman, or age 78 if you’re a man.

At age 50, that’s a reasonably comforting thought.

No one is average

But these are just averages, and haven’t you always felt you were “above average” when it came to school or sports or something? Maybe you’ll be in the half of the population that beats the averages. That could be costly. You’ll need to save more, invest better, or work longer.

In fact, there’s a distinct possibility that you could live to age 100. Centenarians are one of the fastest growing segments of the population. Willard Scott couldn’t possibly name them all on their birthdays, since there are an estimated 76,000 of them, and more every day.

What are your chances to live to 100? There’s more than guesswork involved. There’s even a Web site that will help you calculate your chances. Go to www., and take the test created by researchers at Harvard University and Boston Medical Center. You might be surprised at what goes into their calculations.

You can enter your personal information anonymously: your marital status, height, weight, blood pressure, and sleep patterns. You’ll be asked about your eating and drinking and smoking habits. They want to know whether you drink coffee or tea, and whether you snack on junk food. They even want to know whether you always buckle your seat belt and floss your teeth daily! The quiz takes about 10 minutes, and covers a lot of family history, as well.

I took a break from writing to actually take the test. Astounding. My life expectancy is 109.2 years! No kidding.

That’s either great news or terrible news. I think I’m doing a pretty good job of saving for retirement, but all bets are off if I live that long. Far be it from me to argue with the good doctors from Harvard, but I think the purpose of the quiz -- and the explanations of the scoring -- are to remind us that a healthy lifestyle (and good genes) could take our life span well into the 21st century. That possibility has some distinct implications for retirement planning.

Some people will never outlive their wealth. But for most Americans the art and science of retirement planning is to make your money last at least as long as you do!

So ask yourself whether you’ll feel worse if you run out of money before you run out of time -- or if you’ll be more upset that you come to the end of your lifetime without having spent and enjoyed both the time and money you saved for retirement.

It’s a tough question, and it’s the essence of balancing today’s lifestyle needs with dreams of a secure retirement. In a recent column I explained the retirement planning calculators that use advanced computer modeling to advise on investments and withdrawals during retirement years. They’re available on the Web sites of Fidelity, T. Rowe Price and Vanguard -- all mutual fund management companies.

No guarantees

While those modeling programs can advise on strategies to make your money match your lifetime, there are no guarantees. You might live longer, or you might not. So it’s up to you to make some planning decisions. The sooner you start, the better.

As I’ve said before: Time can buy you money, but all the money in the world can’t buy you time. That’s the Savage Truth.

Terry Savage is a registered investment adviser, and appears weekly on WMAQ-Channel 5’s 4:30 p.m. newscast. Distributed by Creators Syndicate.

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