While the new year (and new decade) is only a couple of days old, I hope yours is off to a great start.
The start of a new year is an interesting time.
While it’s a time for reflection, many of us are looking forward to what’s ahead.
To what’s possible.
With that in mind, I encourage you to read this article I wrote a couple of years ago about “anti-resolutions”.
But as you think about the future, I’d also like to introduce an idea I’ve been thinking about for a while now.
For now, let’s call it the 3 Expectancies of Retirement Planning.
- Life Expectancy
- Health Expectancy
- Wealth Expectancy
I’ve written in the past about Life Expectancy and its impact on your retirement planning.
And for more on the concept of Health Expectancy, you should check out this article by Dr. Peter Attia. I like his use of the term “healthspan”.
And wealth expectancy is really about making sure your money will last as long as you do. Or longer, if that’s one of your goals.
Most of my writing and work with clients would fall under the umbrella of wealth expectancy, as that’s really the heart of retirement and financial planning.
It’s about making sure you have the money you want and need . . . when you want and need it.
For more on my thoughts about making sure your money will last AND that you live the best life possible along your journey, I invite you to browse through my 200+ articles here.
But coming back to this idea of the “3 Expectancies”, I think the potential interest lies at how they intersect.
For example, what if you’ve been a diligent saver? Or what if you’ve built and sold a successful business? What if you received a large inheritance? Or won Mega Millions?
Regardless of how you got there, let’s say you’ve accumulated a lot of money.
But what if you’ve ignored your health over the years?
What if, when you’re ready to start enjoying your wealth and really live the life you’ve always dreamed of, you can’t because of poor health?
I’m sure we’ve all heard stories or actually know people who suffered life-altering health issues or even died within days or weeks of their planned retirement.
I’ve had conversations with clients in their 60s and 70s who tell me they feel like they spend way too much time going to their friends’ funerals these days.
And while sometimes these things can’t be avoided, I believe, more often than not, that they can.
If we’re willing to make the necessary changes to our lifestyle and choices.
For instance, there’s a lot of growing evidence that Type 2 diabetes can be reversed through diet.
Health expectancy and life expectancy are closely related, but I think they’re different.
With the increasing diagnosis of cognitive disease like dementia and Alzheimer’s, people can live for years, maybe decades, with little-to-no quality of life because their overall health can be virtually nonexistent.
But what if you’ve done a good job and have been proactive in managing your health expectancy, but haven’t done such a good job planning your wealth expectancy.
What if you live to 100, but your money only “lives” to your age 85?
And think about your children or grandchildren whose life expectancies are projected to last well beyond our own.
How will they balance their 3 expectancies in the face of longer average lifespans?
However, note that in the US, life expectancy has actually decreased for 3 consecutive years, per this article, also from Dr. Attia. This is largely attributed to “mid-life” mortality linked to emotional and mental health issues.
Just some things to think about as you look forward to another year, another decade, and beyond.
Bottom line: you can have 1 or 2 of the 3 expectancies exclusive of the others. But my wish for you as we embark on a new year is that you’ll establish and maintain a plan for all 3 for the remainder of your days.
If I can help you with your retirement planning (and your wealth expectancy), I’d love to have that conversation with you.
Any other major “expectancies” that I missed?
P.S. – Last week I wrote about the new SECURE act. For more on this new legislation, here are some estate planning strategies for affluent retirees under the new act.