When we prepare retirement plans, we run numbers to make sure that your money will last until at least age 90. Invariably, I get the “but Odette, I will not live to age 90”.
If you can’t imagine living to age 90, think again. Meet Fauja Singh, the 104 year old marathoner. He took up running at the age of 89 and up until last year, has ran a marathon every year.
There are plenty of these examples. The number of centenarians (people aged 100 and over) in Canada is rising. Statistic Canada says that group grew 25.7% between 2006 and 2011. It’s also been the fastest-growing segment for nearly 40 years.
Many of our clients in their late 80s and early 90s also live a very full and active life requiring just as much money as in their 60s and 70s.
In a financial planning perspective, we have to plan for the worst case scenario. Living beyond age 90 and running out of money is not something we want to experience. Depending on our children or the state is even worse.
When calculating sustainable drawdown rates for retirees, we need to plan for the retirement funds to last for life, whenever that age is. Too much money is never a problem, I often say, or “Too much is just enough” as my 92 year old mother says.
So, those numbers I calculate for you are not inflated. They are more realistic than you may think. Who knows, you may be the next Fauja Singh we see happily running into the 100s!
You can read more about Mr. Fauja Singh here.