Why is it so important to save for retirement (Part 1)? Life Expectancy is a big reason. In addition to Social Security benefits (more to come on this next month), your investment portfolio is likely to be your most significant source of financial support in retirement. Naturally, the longer you live, the more financial support you will need and people do continue to live longer. The following chart uses information from the Social Security Administration to compare the probability of living to a specific age for someone born in 1950 versus 1990.
In particular, note the green bars for couples. While a woman or man born in 1950 have only a 24% and 16% likelihood to live to age 90 respectively, there‚Äôs a 50% chance that at least one member of a couple born in 1990 will live that long. Do you have enough in your investment portfolio to support you for multiple decades? The Ascensus retirement tool can provide some insight. Set your Life Expectancy using the Advanced Options and then check your progress toward reaching the monthly income you will need in retirement.