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The Customized Longevity Planning Report©

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How long does my money need to last?

When you’re planning for retirement you want to make sure your money doesn’t run out. The risk of outliving your money is called “longevity risk”.

How long do you expect to live? More important, how much longer would you like to live? As baby boomers approach retirement we are hearing more and more about how we can increase the odds of having a long, healthy life. Website calculators tell us exactly how many years we can add to our life if we stop smoking, exercise, change our diet and floss regularly. In 1935 when Social Security was created, the life expectancy of a white male at birth was about 60. Today it’s about 76. The IRS tables say that a male who reaches age 65 can expect, on average, to live until age 86. Scientists tell us that the next two decades will witness medical breakthroughs that will help us live longer and healthier lives. Some scientists say the human life expectancy is about 120 years

To deal with the longevity risk, most financial planners automatically plan for a life expectancy of 95 to 105. But if you are 61 with a life expectancy of 7 years, you don’t want to spread your money over 34-44 years. Conversely, if you have a life expectancy of 35 years (age 96), you don’t want a plan that runs out of money when you reach age 86.

A New Tool For Determining Life Expectancy

Up until recently the only tool that planners had was life expectancy tables for the general population. 21st Services Customized Longevity Planning Report © changes all that. 21st Services is a leading provider of life expectancy evaluations to large financial institutions, which use the information to decide whether to purchase life insurance policies that the owners no longer need. The reports have been the basis for billions of dollars of policy transactions.

21st Services has taken its decade of experience and developed a version of its life expectancy evaluation for clients of financial planners. The evaluation is just as sophisticated as the one 21st Services produces for the world’s biggest financial institutions. But this version is for the use of individuals and financial advisors who want to make the best, most realistic financial plans.

The evaluation is meant to be used with a trained advisor or by individuals who understand the difference between “risk” and “uncertainty”. The warning that applies to portfolio “expected returns” also applies to “expected life expectancy” – the past is no guarantee of future performance.

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