Are we aware that we are in the age of longevity ? In this blog we have spoken on many occasions that, in a matter of decades, living 100 years will cease to be something exceptional. And that, although it may still sound like science fiction, is a reality that is already underway.
The figures show that life expectancy has doubled in the last century in Spain. Currently, and according to data from the National Institute of Statistics, life expectancy at birth for women in 2019 was 86.2 years and that of men, 80.9 years, although in 2020 the pandemic has caused let’s see a certain decrease: 85.07 for women and 79.60 for men.
The fact that we are living longer and, moreover, with better health conditions is already changing our way of living in the present and planning our future . Because this increase in life expectancy is something that we cannot ignore when we think about our finances and our professional career .
Planning for the future in centenarian lives
One of the direct consequences of living longer is that, if we do not raise the legal retirement age , we will spend a third of our lives as retirees. And this is going to cause our expenses to increase.
On the one hand, we must take into account that, by living better, we are going to reach retirement more active and with more desire to do things, so we are going to have more idle retirements in which we spend more. And, on the other hand, we must remember that living longer increases the chances that we will suffer some dependency or illness , which will cause our expenses -medical, assistance, adaptation of the home, etc.- to also increase. .
This situation leads us to have to act in the present and plan our future with that forecast in mind. In other words, we must make a financial plan in which we take into account our personal objectives for the future – how we are going to want to live that retirement – and what expenses and needs we are going to have. This will allow us to invest having these variables in the scenario to be able to be covered tomorrow.
But… What if I don’t want to retire when I reach the legal age?
Another reality that we must consider is that it is very likely that we do not want to retire at 65, or that we choose to continue working, but in another way. With centenarian lives , it is more than possible that we leave the classic study, work and retire and that we want to reinvent ourselves and think about our future in a more creative way .
Because another factor that we must keep in mind is that in the age of longevity our working life is going to be less and less linear. We may want to change sectors, professions, go back to school or set up our own business. And, for all this, continuous training and lifelong learning are going to have to accompany us.
Are we prepared for that? Are we going to have the necessary resources? Can we afford to change jobs with a lower salary? How much money can we allocate to invest in a new project without endangering the family economy? In multi-stage lives like the ones we are already living, we are going to have to answer questions like these. And in order to do so, we are going to have to draw up a global and personal financial planning exercise in which we first define our objectives and our personal situation.