Living to 100

Q3 | August 2022

Topic: Wealth Planning, Living to 100

Alexandra Jemetz CIM

August 18, 2022


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Living to 100

Q3 | August 2022

“You’re going to live to 100!”

For some, this may sound like a fantastic, welcome prognosis. They imagine gazing at sunsets every evening at the cottage with no alarm clock set for the following day, golf 365 days a year, bucket-list travel, or simply enjoying watching grandchildren grow up in front of their eyes. For others, such a declaration could cause a panic. Am I going to be healthy enough to enjoy my life as I age? Will I have enough money to do the things I want to in retirement? What happens if I require a lot of personal assistance and who will look after me?  Or even the simple query, “What will I fill my days with if I retire at 65 and live for 30 or 40 more years?”. Having a long life introduces a great deal of opportunity as well as uncertainty into the natural process of growing old. It should be clear that living well for 15 years post-retirement and living well for 35 years post-retirement require completely different degrees of mental and financial preparation.

Whether you can’t wait to squeeze even more adventures into your extended life, or whether you are daunted by the spectre of making it to the century mark, let’s hope Woody Allen doesn’t have it right.

“You’ll live to be a hundred if you give up all the things that make you want to.” – Woody Allen

 Despite the temporary effect of the pandemic on life expectancy, we at Nexus know that we need to help clients prepare for a longer retirement than was the norm even just 25 years ago. Some of that preparation is financial, but a lot of it is emotional. In fact, even for clients who are skeptical about their longevity, we observe many who have turned their attention during the pandemic to what financial, mental and physical hurdles they might have to overcome as they age. Clients who accept that they’ll live longer in retirement than they might once have expected have used the disruption of the pandemic to think hard about the rest of their lives and have pushed “doing something about it” up the priority list.

Over the last few years, there have been many common threads in our conversations with clients: accelerated career changes, early retirements, postponed retirements, moves away, moves back, work/life balance disruptions, work/life balance resolutions, unexpected loss, healthy aging and lots of general soul-searching. For those of us fortunate enough to have never experienced real human strife such as war, economic devastation or environmental catastrophe, a global pandemic was a real wake-up call to our own mortality.

If you accept that you could easily live longer than you might have thought 25 or 30 years ago, it is time for a little soul-searching. As you attempt to sort out what is and isn’t important, as well as confront the realities of a changed world and your likelihood to be living even longer in it, make sure to leave time for considering how best to manage the practical financial ramifications of living well through life’s looming transitions. Of course, I’m talking about mundane but crucial matters such as investing for the long-term and wealth planning.

The reality is that people are living longer, which means their money has to last longer, and the costs of living longer are real. A fearful reaction to this is common: “I don’t want to run out of money.” But, interestingly, sometimes the opposite occurs. What if you were underestimating your wealth over time? What would you change? The runway to 100 can be long and gives an investor ample time to accumulate significant wealth. In fact, Warren Buffet made most of his money after the age of 65.(1) There is a cocktail for monetary longevity that balances income and spending, and we can help you find it.  No matter your age, the key principles of successful investing don’t change: keep spending within your limits, buy high-quality, profitable companies with trusted management, stay invested, and ignore the short-term noise.

Closely tied to investing for the long term is planning ahead for what may happen in one’s personal life that could affect one’s financial situation. Many people think that financial planning is only about having enough money for retirement. But, wealth planning – the kind Nexus practices – addresses other issues, which will be larger if we all live longer than we expect. These issues include estate planning, dealing with adult children, philanthropy and making end-of-life decisions in advance. There are things your executor, Powers of Attorney and family members will need to know if you are incapacitated, and for when you’re gone. Having those essential conversations with family, loved ones and trusted advisors while one is still of sound mind may not be the easiest of discussions, but they are some of the most important.

“If we’re fortunate, we may avoid having any serious health issues, but we can’t avoid aging and dying… and we shouldn’t avoid essential conversations. Talking about important matters may be difficult but will certainly make things easier on our family and friends when they understand our wishes.” – Dr. Amy D’Aprix

And what good is developing a thoughtful long-term investment strategy and wealth plan if you are not healthy enough to enjoy the fruits of your labour? Living well to 100 is arguably just as important as the first two areas. The path to 100 is neither straightforward nor prescribed. However, there are many life transitions that are common among us and which benefit from some forethought and preparation to minimize the “deer in headlights” feeling when they do happen. Whether the transition is marriage-related, a move, loss of a job, health change, retirement, death of a partner or divorce, there are some things that can be done ahead of time that can lessen the challenge of having to adjust quickly to a new reality.

In the end, there are big changes that happen in life that need to be dealt with and our professionals at Nexus can help you find solutions. In light of all this, and following colleague Brad Weber’s blog – just over a year ago – entitled Living to 100… Is 100 the New 80?, Nexus is launching its “Living to 100” campaign, in which our clients can expect to find a host of informative articles, events and videos providing insight and guidance on how to live your best, long life.

 

(1) https://www.barrons.com/articles/warren-buffett-has-amassed-over-90-of-his-wealth-since-he-turned-65-51648738715

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