- By 2050, there will be more than one million centenarians living in the country
- Losing one's mental abilities is the top concern of Americans when thinking about living to 100
- Eighty-four percent feel that health/medical costs will have the biggest financial impact on their retirement years
- Americans expect to spend an average of $5,822 a year on out-of-pocket medical costs after the age of 65
CHICAGO, July 24, 2014 (GLOBE NEWSWIRE) -- Today the BMO Wealth Institute issued a report, The Four Keys to Longevity, which examines the views of Americans on various aspects of aging. The new report outlines the different physical and financial considerations that Americans must contemplate as they live longer lives.
The report noted that, in 1970, the average life expectancy at birth in the United States was 71 years. In 2014, it is 79 years and by 2050, the U.S. Census Bureau projects that average life expectancy will be 84 years. Today, according to the National Institute on Aging, there are more than 40 million people in the United States aged 65 or older, accounting for about 13 percent of the total population. By 2050, it is estimated that there will be more than one million centenarians living in the U.S.
"Because of the increasing number of Americans reaching typical retirement age over the next 20 years, people need to readdress post-retirement. As Americans live longer, they must account for the health and financial issues that come with living those extra years," said Stephen Williams, Vice President, U.S. Financial Planning Strategy, BMO Private Bank. "It's also important to re-assess both your physical and your mental status and determine what changes in your lifestyle are required to encourage longevity. Ensuring that your finances are in order and that you have a strong social network in place are key to living a long and happy life."
Mr. Williams added that it's critical for Americans to create a strategy that will help them remain aware of all aspects of their health, well-being, personal life and financial assets.
According to the report, there are four aspects that must be considered to age healthily and happily:
Financial factors: Financial security is increasingly important as one ages and as personal assets multiply over a lifetime. Part of being financially secure is ensuring that retirement savings account for future health-care costs. The report examined the expenses Americans felt would most impact their senior years; 84 percent stated it was medical and health-related costs, followed by food and clothing essentials (58 percent). Further, they expect to spend an average of $5,822 a year on out-of-pocket medical costs after the age of 65.
"When looking at how you'll fund your lifestyle when regular employment income is no longer part of the equation, it's important to think beyond your regular, routine costs. A necessary first step is to talk with a financial advisor who will work with you to develop a financial plan that looks at your retirement income needs and goals and ensure they are in line with your risk tolerance," said Michael Miroballi, President, BMO Harris Financial Advisors. "By working together, you can determine the best way to achieve financial security that can help to sustain you in your golden years."
The body: Being healthy is one of the essential elements in living a long life and will play a critical role in keeping health-related costs down. The report examined the most common choices that Americans make to keep their bodies healthy, which include eating well (53 percent), exercising (49 percent) and visiting a doctor regularly (33 percent). Beginning to engage in these actions early can help ensure a long and healthy life.
The mind: Keeping mentally alert is central to living the best possible life. The report found that the biggest concern Americans have about living to 100 is losing mental abilities (60 percent). Other concerns include relying on others to take care of them (53 percent), losing the people they love (52 percent) and medical costs (50 percent). Keeping on top of cognitive skills – such as through brain teasers or reading books – will help ensure that the mind stays sharp into old age.
Social factors: Societal interactions can also play a role in longevity. When asked what Americans plan to do during retirement, 62 percent said they will spend more time on hobbies, one-quarter will start a new part-time job and 18 percent will write a memoir. Further, the report noted that the most important factor for enjoying an ideal lifestyle in old age was also social- staying in contact with family and having a support network (36 percent). This is followed by being financially secure (23 percent). Getting a part-time job in a field of interest is a way to supplement income and increase social interaction.
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About the BMO Wealth Institute
The BMO Wealth Institute provides insights and strategies around wealth planning and financial decisions. The Institute's team of professionals have deep expertise around all aspects of wealth planning including retirement, estate, tax and insurance.\
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