Tom MacDonald - Reverse Mortgage Consultant






       Reverse Mortgage Consultant

      Tom MacDonald


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My dad retired when he was 62.  His life expectancy (by the charts) was a little over 10 years.  He died at age 72 - almost 73.  That was 25+ years ago.  He had a decent pension.  He also set it up so my mom received the same amount they did before he died after his death.  That worked well for her for the next 25 years dying at about age 91 a few years ago.

Now, those retiring at age 65 are given an approximate life expectancy of 20 years.  Most of us don't have pensions.   According to a MONEY magazine article in March, 2016, one- third of Americans report they have zero retirement savings.  23% have saved less than $10,000.  That is a total of 56% that have saved less than $10,000.  For those Boomers over 55, that percentage is still a whopping 45%.

In a 2015 study by Transamerica Center for Retirement Studies, 67% of those workers over 50 planned to work past age 65 or do not plan to retire.  Yet 91% of current retirees say they are fully retired and the median age of retirement was 62.  The majority (60%) of retirees retired sooner than they planned. Two thirds of those did so for employment related reasons (layoffs, buyouts, etc.) while another 27% did so for health reasons.  As they say, "best laid plans of mice and men often go awry."

A law effective January 2, 2016, prevents those not having turned 62 yet to defer drawing their own Social Security (in order to generate a larger amount when they do claim) while claiming a spousal benefit.  As they say, "Best laid plans..."

Did you know that 20 year life expectancy may be skyrocketing?  In a July, 2016 Success magazine article titled, "How to Live to 150" it is written that due to knowledge and medical advances growing geometrically (not in a straight line - more like the right side of the letter 'U') that living to 150 may be significantly on the low side.  That may seem ridiculous but consider that in 1900, the life expectancy was half the current 80 years.  The CEO and chairman of the ZPRIZE Foundation, Peter Diamandis (age 55), has now founded a diagnostic and therapeutic company in San Diego called Human Longevity IncAnd is thinking he (even at his age) may make well past 150.  Currently it costs $25,000 to have 150 gigabytes of your physical being mapped and copied to six Blu-ray discs.  That price will obviously come down with volume.  In fact, (after a health scare and a search for better wellness) I began using and marketing for a company called TriVita, which has created what they call a Vitality Planner to individualize your medical history, life style and proclivity for certain diseases as a step to marketing their products.  Obviously a tiny fraction of HLI's $25,000 project but at a tiny fraction of the cost.

So, if you are going to live to 150 (you don't have to buy into that number but ...what if...) do you wait until age 125 to retire so you have more time to save enough to retire for 25+ years??

At a minimum, if you have 20 years of life left from the time you retire, do you have enough income and savings to do so?

While a Reverse Mortgage probably won't have enough money to cover the extreme life expectancies, take a look at my articles $12,000 to $1,000,000 +/- and I Don't Need a Reverse Mortgage as a possible defensive move.  (Although, I'm guessing that once life expectancies start to skyrocket, the growth factor mentioned in the first article will get changed.)

So, what is your plan if you live longer than you expect? Or have to retire earlier than you plan?