American Life Expectancy Has Gone Down

The good news is, people might not need to save quite as much money for retirement as before. The bad news is the reason for that statement. The life expectancy for the US is in a decline. In fact, American life expectancy has gone down for the last three years in a row.

This undesired streak marks the first time in 100 years that the life expectancy in the U.S. has declined for three or more consecutive years. American life expectancy declined for four years in a row from 1915 to 1918. To appreciate those circumstances and put our current decline into perspective, both the worldwide epidemic of Spanish Flu and World War I occurred during those four years.

The Numbers

Life expectancy is a curious beast. You will have one life expectancy at birth and a significantly different likelihood, if you live to age 25. Surviving to age 25 increases your life expectancy, and making it to middle age extends the projections even farther.

For example, a baby born in 2016 had a life expectancy of 76 years for a male and 81 for a female. Once that baby turns 25, the estimates are 89.5 years for a female and just under 87 years for a male. People who were middle-aged in 2016 had a good chance of living beyond these years. The projections in 2016 saw a decrease of six months, compared to 2015. The lowered life expectancy projections for our country are continuing.

Factors Driving the Decline in Life Expectancy

The Centers for Disease Control (CDC) suggests that, while many elements go into the calculation of life expectancy, these three issues might be responsible for some of the downward slide of the American life expectancy:

  • Increased suicide rates. Suicide in the United States has skyrocketed during the last 20 years. The suicide rate is 33 percent higher now than it was in 1999. You might attribute the increase to the Great Recession, but the most dramatic surge in numbers was in 2017, with a 3.7 percent jump. On a side note, worldwide suicide rates went down by almost 30 percent during the same time.
  • Drug overdoses. The epidemic of drug overdoses is now so massive that it is affecting national life expectancy. Within the last ten years, fatal drug overdoses increased by 72 percent. These numbers include deaths from street drugs and prescription drugs. More than 70,000 people in the U.S. died from drug overdoses in 2017. Over 47,000 of those deaths involved opioids, like heroin and prescription painkillers. Doctors today prescribe three times as many opioids as they did in 1999.
  • Liver disease. Deaths from cirrhosis and other chronic liver diseases have gone through the roof during the last decade. Genetics and the heavy consumption of alcohol get much of the blame for this phenomenon.

Many other factors contribute to life expectancy. Lifestyle choices, like nutrition and activity, can help a person live a longer, healthier life. We spend more on healthcare per person than any other country. While the life expectancy in our country has decreased, the projected lifespan is still increasing in France, Sweden, the Netherlands, and Germany, albeit at a much slower rate than before.

References:

CNBC. “US Life Expectancy has been declining. Here’s why.” (accessed November 14, 2019) https://www.cnbc.com/2019/07/09/us-life-expectancy-has-been-declining-heres-why.html

Financial Advisor. “U.S. Life Expectancy Now 6 Months Shorter.” (accessed November 14, 2019) https://www.fa-mag.com/news/u-s–life-expectancy-now-6-months-shorter-29781.html

Things That Can Drain Your Retirement Savings

You can follow all the rules, work hard and save the amount of money the experts recommend for your retirement and still get blindsided by an unexpected situation that wipes out your retirement savings and leaves you on shaky financial ground. There is a limit to how much money anyone can save for retirement, so advising you to save even more money for retirement might not be the solution.

Becoming aware of the threats to your retirement savings might allow you to avoid some of them or develop strategies, in case you find yourself in one of the situations one day. Here are some of the things that can drain your retirement savings.

Inflation and the Cost of Living

Remember what a newspaper, loaf of bread, or house cost 25 or 30 years ago? Chances are, those and many other things cost significantly more today than they did then. Many people live for two or three decades after they retire. If, for example, $4,000 of income would have provided a comfortable lifestyle in the year a person retires, it might not be adequate in 15 or 20 years.

The good news is that you can inflation-proof some of your living expenses. If you have a fixed-rate mortgage, you will lock down the amount of your housing cost. Of course, paying off your mortgage before retirement is an even better option. People who rent instead of buy, however, will face ever-rising payments for rent. That lovely apartment that cost $2,000 a month when you moved in could cost double that price after a few decades.

You can also press the pause button on some other expenses, like insurance. Some disability and long-term care policies offer a cost-of-living protection option. You should also check to see if your retirement plan administrator offers any fixed rate or guaranteed return investments that come with cost-of-living adjustments.

Spend Your Time, Not Your Money

When you are no longer working full-time, you might decide to get involved in activities you wanted to engage in before but did not have the time. Joining a local service club like Rotary or the Lion’s Club can be a wonderful way to connect with like-minded people and serve your community, but it can also be expensive. You will have membership dues, but those are just the start.

Many service clubs meet at mealtimes, so you will have to pay the cost of the meal, which is usually at a restaurant. Because service clubs perform projects to help deserving causes, there will be constant fundraisers and appeals for contributions. This is not intended to discourage people from joining service clubs, rather, to inform you about the costs involved if you choose to do so. Your community probably has a volunteer corps you can participate in at no charge, if your goal is to help others without going broke.

Stay Healthy

Face it. If you are retired, you cannot afford to get sick. The cost of healthcare goes up every year. Current retirees pay on average about $5,000 to $6,000 a year for Medicare premiums, copays, and prescription drugs. A significant medical crisis can wipe out your retirement savings.

Do everything you can to stay healthy. Eat well and stay hydrated. Talk regular walks and avoid falls. Stay away from sick people. You should also keep a positive attitude. Maintaining your health is one of the most effective ways to make sure you do not run out of money in retirement.

References:

AARP. “5 Threats to Your Retirement Savings.” (accessed July 16, 2019) https://www.aarp.org/retirement/planning-for-retirement/info-2019/5-threats-to-your-retirement-savings.html