Knowledge is power: that is especially true when financial planning for longevity. With healthier lifestyles and medical advances, many can expect to live into our 90s. That’s an incredible gift, while it also raises an important question: how do we ensure we don’t outlast the wealth we create?
Working several decades into a typical retirement age in our 60s is certainly a life
achievement. We must realize we could have a few decades in retirement without earned income to replace the savings we tap.
The first step is simple: get clarity. When we get our arms around our balance sheet, what we own, what we owe and our cashflow; what’s coming in and going out, the numbers can be less intimidating and more empowering.
From there, we can design our financial roadmap to lifelong prosperity. We project what can be spent today, what needs to be set aside for tomorrow, and invest appropriately. That means curating a financial timeline, one that likely needs to support substantial foundational spending in our early years, until our savings potential inflects.
Next, we can start to layer in larger allocations in our life like travel, celebrations and hobbies, while mindfully forecasting later needs such as health care and long-term care. Meanwhile, balancing the right amount of investment risk that will help us outpace inflation and realize our goals.
This clarity and proper planning provides flexibility and a sense of security. Instead of
feeling stuck, worrying about a funding shortfall later in life, we gain the confidence to live fully, knowing our plan accounts for our goals and longevity. Perhaps we can layer in and pursue additional goals important to us; from supporting higher education for loved ones to giving more to favorite charities, sooner vs later.
When knowledge is our guide, longevity and prosperity can align demonstrating how we can enjoy life today while staying prepared for our tomorrows.
Mary Miller Fazio is a Financial Advisor with the Global Wealth Management Division of Morgan Stanley in Atlanta. The information contained in this article is not a solicitation to purchase or sell investments. Any information presented is general in nature and not intended to provide individually tailored investment advice. The strategies and/or investments referenced may not be appropriate for all investors as the appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives.
Investing involves risks and there is always the potential of losing money when
you invest. The views expressed herein are those of the author and may not necessarily reflect the views of Morgan Stanley Smith Barney LLC, Member SIPC, or its affiliates. Morgan Stanley Smith Barney LLC. Member SIPC.
CRC 4843211 09/25