As we continue with this Longevity Planning/Management Series, today we will expand on a couple of the Lifespan statistics addressed in my last Blog — specifically, the financial effect of increased longevity.

While we’ve done a fabulous job increasing longevity over the last 20-30 years in this country, i.e. the 85+ population is the fastest growing segment of the U.S. population; the 90+ population has tripled in the last 30 years; and the 100+ population has doubled in the last 20 years; one of the most concerning effects of this new longevity is the last statistic shared in my last blog that retiree healthcare costs are up 500% in the last 20 years.

Clearly this is very concerning to most people – particularly retirees and those approaching retirement.  In fact, in a study addressing the top financial fears among Americans today, far and away the number one fear is healthcare costs … for what, how much, how long, coupled with a healthcare system with a lot of holes in that safety net, makes people very uncomfortable.  Interestingly enough, healthcare costs replaced outliving our money — which held the number one financial fear for decades – by almost a three to one ratio.  And not only was this among even the most affluent consumers, the fear of rising healthcare costs and outliving our money also significantly beat out the fear of decreasing Social Security benefits, inflation, another market crisis and income/capital gain taxes.

As a financial gerontologist, I firmly believe there’s a correlation between the lack of knowledge and understanding about this new United States longevity and the financial effect of it.  In fact, according to a 2016 study by the American Society of Actuaries there is a 50% chance that a 65+ year old male will live to 85; a 65+ female will live to 88; and one partner of a 65+ couple will live to 92.  Basically this means we’ll continue to see ages 80s and 90s across the board consistently among many, many Americans.

The real concern however, is how many people are actually financially prepared to live this long?  According to a Employee Benefit Retirement Institute (EBRI) 2015 study, only 56% of Americans are prepared to live to 75; 46% are prepared to live to 85 – which is not only the fastest growing segment of the U.S. population, but 75% of people believe it very likely they will live to 85; and a mere 35% are financially prepared to live to 95.

So the real question then becomes, what’s their plan B??  Unfortunately I believe that too many people don’t plan for this phase of life because of an outdated set of beliefs as to what living in our 80s and 90s can be and actually looks like today.  Many in their 80s and 90s live healthy, active, vibrant lives. Yet too many believe it’s an automatic time of decline and poor health … so who wants to plan for that?

The reality is, the majority of Americans want to live to 100 … IF they have their health and if they have their wealth, according to TIME Health 2016.  Therefore it’s essential to start talking to people, clients, prospects, etc. about the reality of this new longevity and the importance of preparing financially for it too.  Clearly the financial industry is perfectly positioned to reframe conversations to focus on longevity planning issues as a more holistic approach to this new view of retirement – particularly being it’s far more likely to resonate and connect with consumers today than just the old retirement planning model conversations.