There is much about aging that we can't control. But there is much more that we can.
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According to a United Income report, current retirees are healthier, wealthier, and living longer than any previous generation. The report shows why the average life expectancy of 60-year olds increased by 58 percent since 1900? 62 percent of retirees are without physical or cognitive limitations which is an increase of over 25 percent since 1963, the first year the data was recorded. These statistics, should they continue, offer more hope to soon to be and current retirees than generations past.
Matt Fellowes, CEO of United Income discussed with Fox Business how retirees can continue to enjoy long lasting, healthy and wealthy retirements. .
Boomer: Your report shows current retirees are healthier, wealthier and living longer than any previous generation. How and where are they using that additional vigor, money and time?
Fellowes: They are using their extra wealth by staying put in the homes and communities that they lived in as workers rather than fleeing for low-cost areas of the country that attracted previous generations of retirees. Surprisingly, they have not increased their income in retirement nearly as much, though. While average wealth has increased by over 100 percent, the average income of retirees has increased by 50 percent, indicating that this generation of retirees is stockpiling more wealth for longer periods of time compared to previous generations.
California boasts the largest number of retirees out of any state, now accounting for more than one of every 10 retirees. Florida, Texas, New York, and Pennsylvania round out the rest of the top-5 most popular states among retirees, jointly accounting for more than one out of every three retirees.
Boomer: With the increased health and wealth of retirees what are seniors finding about their cost of living priorities?
Fellowes: The average retiree cuts their spending by about 2 percent every year throughout their retirement. The biggest drop over time is spending on lifestyle expenses, like travel, apparel and entertainment; but, essential spending on transportation and housing falls too, as retirees pay off their mortgages and rely more on friends and family for getting around town as they age. Healthcare is one of the only expenses that tends to increase through retirement, although it tends to increase incrementally for nearly all retirees.
Boomer: Financial insecurity among retirees has declined. What can we do to ensure a successful retirement plan?
Fellowes: Responsible spending and healthy, active living are two of the most important ways that retirees can ensure that they have a successful retirement plan. One of the biggest overlooked risks, though, is that retirees put too much of their savings in cash and low-return bonds. While these may feel safer than stock market investments, they actually can become much riskier for retirees because they do not generate a high enough investment return needed to pay for lives that are increasingly lengthening. Most retirees we work with would be better off by investing more of their portfolio in stocks than in bonds, which tend to get over-recommended to retirees.