One of the most important tasks undertaken by a financial adviser is to help clients consider their life expectancy.
This is often a tricky subject to broach. Contemplating our mortality can be an uncomfortable scenario for many.
However, when it comes to financial planning, it is essential.
Focusing on, and working a financial strategy around, average life expectancy will help to ensure, put simply, that your money doesn’t run out during retirement. This would, of course, have devastating consequences.
This straightforward life expectancy calculator reveals how long you potentially have to live, and how long your pension pot will need to last.
As an example, a 45-year old male has a current average life expectancy of 86 years. Naturally, this figure is influenced by numerous factors, such as health and lifestyle choices, which differ greatly from person to person.
As shown by the calculator, this 45-year old male has a 1 in 4 chance of reaching the age of 96, and a 1 in 10 chance of reaching 101. Therefore, his retirement savings must take this into account.
Life expectancy is increasing all the time, meaning savings need to go further. Cost of living is on the up and there are increasing deficits in company pension schemes. Coupled with these factors are low interest rates and annuities; mounting care and medical costs; continual changes in taxation and the fact that the State may not be able to support future generations of retirees, as it has done in the past.
Which is why individuals must prepare for their retirement as early as possible in their working lives, in order to maintain or enhance their ambitions as they approach later life.
An independent financial adviser will help you to devise, execute and manage a sound strategy to help safeguard your financial freedom in the future.
Blog published by Mike Coady.