New figures from the Department of Work and Pensions (DWP) show that over two million people who are already over age 50 will reach their 100th birthdays.
These figures show how stark the retirement planning issues faced by so many of the ‘baby boom’ generation really are. They also highlight the growing need for proper care fees planning in older age.
The DWP projections reveal a population of 2.2m people, already in their fifties or older, who face up to a further 50 years of life ahead of them.
In terms of retirement planning, this poses some significant challenges, as the balance between working and retired life is likely to be skewed in favour of the latter.
Whilst many of us want to be able to continue working past our normal retirement ages, in practice this can be difficult. Poor health or lack of available jobs are just two of the factors that can force people into an earlier than desirable retirement.
Planning to work long into retirement is not always a very good financial plan.
Getting a telegram from the Queen is a significant achievement. In financial planning terms, it means that you have outlived typical life expectancy. There is a good chance that it also means you have run out of money, unless you previously took steps to guard against this eventuality.
In addition to proper retirement income planning, it is also important to consider the likely cost of funding long-term care. Whilst the provision of care for the elderly remains a government priority, it is likely to be unaffordable for the State in the future to provide a personalised care package to each person who needs it.
Under the terms of the current system, the cost of care in older age is typically self-funded; often through the sale of property to raise a capital sum which can then be managed, through a variety of options, to pay the fees for residential care or care in the home.
There are always two sides to the news associated with improved life expectancy. Make sure that you consider the financial implications of a longer life.
Photo credit: Flickr/Djenan
