Aging population changes retirement planning

Key Points

Actually, thousands of retired people now have at least 1 living parent. In fact, according to the U.S. Census Bureau, more than 70,000 people in the United States have lived beyond the age of 100, and that number is expected to multiply at least 6-fold over the next 30 years. Ken Dychtwald, PhD, an expert on aging, reports that two-thirds of all the people in the history of the world who have lived to age 65 are alive today.

The growing number of elderly signals a vast change in America and in retirement. Many of those who have made it beyond age 100 have outlived their money. They depend on Social Security, public assistance, and their families to make ends meet. In other words, more and more families face a dependent parent as one facet of retirement.

It's difficult to overstate the impact of the aging population. The same NIA study finds that, for the first time, there are more adults over 65 than children under 5. That means the next social revolution could be about aging issues. French workers rioted earlier this year when their government wanted to raise the national retirement age.

How does this matter to you? Changing demographics affect our financial behavior in 4 major areas:

The biggest mistake retirees make is ignoring the need for financial flexibility. The time span involved for meeting today's retirement needs requires an ability to adjust in the future. Think back to 1980. How much were you earning then? What kind of house did you live in? What did your family look like?

Now jump forward to 2040. How much money will you need? Where will you live? How many descendants will you have? That's only 30 years hence, and many of you reading this will still be alive then.

Those are the key retirement issues. And they are why we ask about parents when we collect retirement-planning information.

The author is principal/chief executive officer of Family Investment Center in St. Joseph, Missouri. The ideas expressed in this column are his alone and do not represent the views of Medical Economics. If you have a comment or a topic you would like to see covered here, please e-mail medec@advanstar.com