3D numbers counting down from 100 falling like dominoes

Can you afford living to 90 or even 100?

It is official – many of us could live beyond age 90. A recent research report published by the Imperial College of London (ICL) in collaboration with the World Health Organisation (WHO) has identified that South Korean women will be the first to have an average life expectancy that exceeds 90. The report indicates that this trend of prolonging life is expected to continue as more countries like South Korea demonstrate good nutrition in childhood, low blood pressure levels, good access to healthcare, and low levels of smoking.

Professor Majid Ezzati from ICL said “We repeatedly hear that improvements in human longevity are about to come to an end. Many people used to believe that 90 years is the upper limit for life expectancy, but this research suggests we will break the 90-year-barrier. I don’t believe we’re anywhere near the upper limit of life expectancy – if there even is one.”

The great news is that New Zealand is not far behind South Korea and, along with the likes of Australia and Canada, it is rapidly catching up. The report indicates that by 2030, New Zealand men on average will be living another 22 years beyond age 65.

This increased life expectancy means that, progressively over time, an increasing number of New Zealanders could potentially live to age 100.

What are the implications?

Not only will many of us live longer, but we will also statistically be more active than before. Increased activity due to good health often leads to higher expenditure in retirement. The implications for saving and investing are huge. These include:

  • Saving more during our peak earning years and ensuring we obtain a better investment return on those savings.
  • Being able to liquidate major assets, such as our home, in retirement. This may require being able to turn the house into an annuity type investment so you can obtain income.
  • Having greater reliance on our children and grandchildren to help support us financially in retirement. This may involve pooling assets such as joint ownership of a multi-generational family home.
  • Maintaining good health for longer, exercising more and undertaking regular job retraining/up-skilling so we are able to remain employed for longer.
  • A rising inability for future governments to continue to provide New Zealand Superannuation at current levels and the inevitability that the retirement age will need to rise and the amount paid to superannuitants need to drop as a percentage of the average wage.

Can you comfortably live to age 90, 100, or even beyond? The team at Milestone Direct has a range of modelling tools designed to create a number of life scenarios to help identify what is the most appropriate strategy for you in retirement. The tools consider your total asset value including investments, property, debt and businesses.

Feel free to contact us and we can work to build the scenario that you believe most closely mirrors your assets and life expectancy.