Can I afford to live to 100?

At a recent conference for self-employed accountants, someone asked, “Can you afford to live to 100?” Immediately they began looking up life expectancy figures, and concluded that the question was moot. What they did not understand is that life expectancy is increasing and in about ten years, the age in question may very well be 110.

Thirty years ago, a new car would have set you back R32 per month. In the next thirty years, inflation will have us reminiscing, quite fondly, about 2017 prices. Also, someone retiring at the age of 55 is likely to need at least one more car during their retirement.

Accommodation needs are also changing. Twenty years ago, we would have been quite content to live in your home and retire gracefully. Recent trends in violence and crime toward the elderly makes the decision of where to retire a more complicated process.

A client of ours is about to move into a Retirement Centre. The current cost of his room and board is around R17 000 per month, this is expected to increase. Meaning over the next three years, the amount he spends on housing could easily exceed R1 000 000. Had all his investments not been carefully managed, he would have run out of money quite quickly. Holistic financial planning ensured that his income streams are sufficient, and will remain sufficient to allow him to retire comfortably.

Advances in medical science are keeping us alive longer. However, as we age, our quality of life decreases, resulting in more being spent on treatment and medication. The current cost of frail care is close to R25 000 per month. Which, not accounting for inflation, would cost R600 000 over a two-year period.

At Northwood Financial Services, retirement planning is one of the many services we offer. So, can you afford to live to 100? The question is a valid one, and now is the time to ask it.

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