What is your 100-year plan?

Have you ever imagined yourself blowing out 100 candles on your birthday cake? No? Most of us are too busy to think about anything beyond next week! But it may not be such a stretch of the imagination to reach 100 years according to the experts, who say longevity is increasing with no end in sight.

Today almost half of use can expect to live beyond 85 years. For the young ones born in 2013, 16% of females and 10% of males can expect to reach 100 years.

With many people aiming to retire in their 60s, a little maths tells us we might be looking at a (very) long retirement.

So, how can we make sure our retirement is long walks on the beach rather than baked beans on toast every night? We need a plan, of course, a 100-year plan.

Can you afford to live until 100?

Joining the Centenarian club sounds like a blast, but can you actually afford to live until 100?

Coming up with a lump sum figure you’ll need for retirement is tricky. It depends on your lifestyle expectations, health, relationship status and any regulatory rules and changes.

Your final innings is also a big factor, and as we’ve seen above it may be wise to start planning for a longer rather than shorter life.

The Association of Superannuation Funds of Australia details what budget a household would need, which is always being updated. If a couple was aged 65 in 2020, the national figure for a single year of living would be over $60,000 in some cases, depending on the standard of living you wanted.

For those with a modest lifestyle, you would need

• Singles: $27,987
• Couples: $40,440

For those wanting a comfortable lifestyle, you would need:

• Singles: $43,901
• Couples: $62,083

Financial planning for a longer lifespan

It’s easy to get distracted by the dollars. But it’s really important to think about life goals, dreams and expectations first. It might sound a little airy-fairy, but these are the things driving your financial needs, right?

Where do you want to be at retirement? Thinking about your next adventure is exciting, but have you thought about what you’d likely to be doing at 70 years? At 80, 90, and – dare we dream about it – 100 years?
Once you have a clearer picture of the years ahead, it’s time to think about how to get there, financially. Some questions you might ask yourself include:

• Do you need to start making extra super contributions now?
• Should you start a savings plan?
• Where can you save money now to benefit your future?
• How can you add additional income streams to your income pool?

You need to be realistic about your needs and allow for the things we’d all like to avoid, like illness and inflation. A flexible financial plan, with a wider variety of income sources, is the most secure path to the future.

Working longer

An obvious way to gather more money to fund your retirement is to work longer. And while snoozing the morning alarm for another 10 or so years isn’t very appealing, that’s exactly what many Aussies are doing.

The most recent stats reveal a big jump in the retirement age. For those aged 45 years and over who are retired, the average age at retirement was 55.4 years, with the main source of income being from the age pension. Who knows what the retirement age will be when you make it there? Hint: it may be time to find a job you love!

Making your money work harder

So, what should your retirement nest egg look like? How do you work your money so that your retirement fund is more golden egg than rotten egg?

Ideally, you want your capital to keep growing, with your returns more than your annual income. “Historically only growth assets, such as shares and property, have consistently outpaced inflation,” say the experts.

On the other hand, we all saw what happened to growth assets during the GFC — so experts also suggest having two years of capitalised living expenses as cash.

Protecting your lifestyle

While we can make predictions, the road ahead is unknown. Be optimistic. You have the gift of time — so much time according to the stats. But be realistic, too. As you’re planning, think about all those bumps and forks in the road ahead, and how you can protect your family and your lifestyle for those wonderful years ahead.

Insurance can help protect you and your family in the coming years. Choosi makes it quick and easy to find insurance – compare providers and quotes for life insurance and funeral insurance today.