80 Is The New 60
Traditionally, when you get old, you retire.
But these days, people are less likely to make the connection between retirement and old age.
UBS recently conducted a survey of 2,319 of its wealth management clients, and they asked them: "Do you consider yourself 'old'?"
"Most investors do not feel "old" until they are in their 80s," found UBS. "Only 31% who are in their 60s and 47% who are in their 70s feel old, while 77% of those in their 80s feel old. This demonstrates a notable shift from prior generations, as investors believe on average that their parents were old at 62, a number that also coincided with when people typically retired."
"But today, retiring from work does not equal old," they added. "And even the onset of health and memory loss issues doesn't equal old. To most people, it's when people can no longer live in their own homes or when they can no longer drive. In short, you get old when you lose your individual independence, when you can't do things for yourself."
While it is fascinating to see how we perceive old age, there are real implications for all of this. And it has to do with retirement.
"Overall, investors seem to underestimate how much of their prior income they think they will need during retirement," writes UBS. "On average, they believe they will need about 60% of their prior income during retirement. This is well below standard industry estimates of 78% of prior income. Underestimating annual income needs becomes even more acute in the context of a retirement that may last as long as 30 years."
It may come off as good news that we're living longer. However, living longer comes with greater living costs.
Plan accordingly.