Start Planning for Your 100
100 years ago, a young man from Ft. Bragg, California named Cornelius Vander Starr started a general insurance agency in Shanghai, China. From that humble beginning would grow the global company that is AIG.
Today, American International Group, Inc. (AIG) is one of the world’s largest insurance organizations with nearly 50,000 employees serving customers in more than 80 countries and jurisdictions around the globe.*
Here’s to our 100—and planning for Your 100!
Start Planning for Your 100
As AIG celebrates its 100 years, we encourage you to plan for your 100. While living a long life was once relegated to a lucky few, today it’s increasingly becoming the norm, thanks to medical advances and healthier lifestyles. It’s time to embrace the new longevity.
Embrace the New Longevity
A recent AIG survey found that more than half of Americans surveyed say their goal is to live to 100, reflecting growing sentiment that later life is not about disability and decline, it’s about deepening relationships with family, being around to witness new discoveries and remaining productive.1
53% of Americans surveyed say their goal is to live to age 100
Major benefits of living to 100:
- 39% Continue to develop deep relationships with family
- 32% Be around to witness new discoveries and watch the world evolve
- 17% Continue to remain productive
- 13% Have many years of leisure after a life of hard work
Plan for Your 100
The number of people who have reached their 100th birthday—so called “Centenarians”—is growing rapidly and projected to reach over 750,000 by 2045.2 Will you be a future member of the 100 club?
Re-Think Life Expectancy
As you think about your future and plan for your retirement, it’s important to recognize that life expectancy is a mid-point, not an end-point.
If you’re age 65 today, your life expectancy is:
However, there’s a strong possibility you could live well beyond these ages—and that possibility should be taken into careful consideration, particularly when it comes to planning for your retirement income.
Consider the Odds of Living Longer
The reality is that you could end up living a lot longer than you may think. Consider the probabilities of a 65-year-old living well into his or her 90s—if not to age 100.
For example, there’s a nearly 1 in 3 chance a 65-year-old female will live to 95; a 1 in 5 chance a 65-year-old male will live to 95. These are not slim odds. And if they hold true for you, it could mean you will be spending three or four decades retired and without a regular paycheck.
Probability of Living to Specified Ages5
- Age 90: 53%
- Age 95: 31%
- Age 100: 12%
- Age 90: 43%
- Age 95: 21%
- Age 100: 6%
Make Smart Lifestyle Choices
You should also know that if your goal is to live a long and healthy life, there are things you can do right now to help increase your odds. Research shows that the lifestyle choices you make today can have a profound impact on your longevity.6
By finding ways to maintain your health, challenge your mind and nurture your soul, you’ll not only increase your chances of living longer, but you’re also likely to live a happier, more productive life.
Laughter: +8 Years
It’s true; laughter really is good medicine. It boosts your immune system, relieves stress, dissolves anger and brings people together. Laughing on a regular basis can add 8 years to your life.
Exercise: +3 Years
Exercise doesn’t have to mean pumping iron or spending time on the treadmill. It can just be taking the stairs instead of the elevator.
Pets: +7 Years
Owning a pet could add 7 years to your life.
Evaluate Your Priorities
We asked Americans, “If you knew you were going to live to 100, what would you do today to prepare?”
Here’s a sample of what we heard:7
“Work longer. Invest more.”
“Keep myself mentally and physically in the best possible condition I can.”
“Take yoga and exercise.”
“Eat healthy foods.”
“Take good care of myself and invest a little more aggressively.”
“Start planning as early as I can and start saving.”
“Save, save, save.”
“Pay off all of my debt.”
“Work on staying healthy to avoid future medical costs.”
“Have better connections to friends, family and community.”
How would YOU prepare if you knew you were going to live to 100?
Prepare for the Challenges
While increasing longevity is certainly a reason to celebrate, it also introduces new challenges—including health worries. 35% of Americans surveyed say that serious health problems worry them the most with respect to living to 100. Being a burden on family and running out of money to live comfortably were also identified as top worries.8
Top Worries of Living to 100: Health Problems, Being a Burden & Running Out of Money
Q: What is the greatest worry you have about living to 100?
- 35%: Serious health problems
- 27%: Being a burden on family
- 25%: Running out of money to live comfortably
- 6%: Being lonely
- 5%: Not having a purpose
- 3%: Having nothing left to leave my children/grandchildren
Note: Response total exceeds 100% due to rounding.
What’s more, many Americans surveyed don’t believe they have a retirement savings plan that will support a retirement that might take them to age 100. More than half of those surveyed are not at all confident―or only somewhat confident―in their current plan.8
Q: How confident are you that your current retirement savings plan will provide for you financially if you were to live to 100 years old (up to 40 years of retirement)?
- 25%: Not at all confident
- 26%: Somewhat confident
- 19%: Confident
- 21%: Very confident
- 9%: Extremely confident
Prepare for Market Volatility
When planning for 100 and the retirement income you will need, it’s also important to factor in market volatility. Once you begin taking withdrawals from your investment, the order in which you encounter positive investment returns and negative investment returns (known as the “sequence of returns”) poses a retirement risk that should be carefully considered.
If you experience a market downturn early in retirement, it can have lasting effects on your portfolio’s ability to generate sustainable income throughout retirement.
Will you retire at the “wrong” time?
As a respondent in our most recent survey noted:
“ The bad timing of a market downturn right around the time of retirement could push me to working later, or risk beginning taking withdrawals when things are down.”9
Will You Outlive Your Money?
A longer life presents the need to generate income for a retirement that could last 30 to 40 years. That’s why it’s important to work with a financial professional to ensure you’ve got a plan for income that will last as long as you do—whether that’s well into your 80s, 90s or to 100+.
Our recent surveys of Americans revealed some powerful insights with respect to fears around money and retirement:
59% of Americans surveyed say they fear running out of money more than death10
Q: Which of the following do you fear more? Responses: Running out of money (59%); Death (41%).
51% of Americans surveyed have no formal withdrawal strategy for generating income from their retirement savings11
Create a Plan for Protected Lifetime Income
When it comes to generating retirement income for today’s increasing longevity, an annuity can help you enhance your retirement security by providing you with protected lifetime income that’s guaranteed to last for as long as you, or you and your spouse live.
There are a number of different types of annuities from which to choose. Your financial professional can help you determine if an annuity makes sense for you. Please see the back cover for additional information about annuities.
Here’s what a few of our survey respondents had to say about the value of trading a portion of their retirement savings for protected monthly income that’s guaranteed for life:12
“I’d feel more at ease, because it would be consistent income.”
“ It would definitely allow me to plan and budget exactly what I will have each month. I can choose to use my income each month or save some of my discretionary income to go on a vacation. I would feel secure knowing what I could afford and what I could not.”
“ A protected monthly income for life gives me the sense of security that allows me to continue to live the way I choose.”
“ It would be a relief on my mind. Knowing that I don’t have to worry so much about the markets.”
“It would be like a paycheck, as long as it is regular, I’d plan my life around it.”
“ It would give me more confidence that I will have money in the future...so I would not feel bad about a trip I go on or out to eat. I will already have it worked out in my budget.”
“It would make me feel much better about living to an old age.”
Start Planning for Your 100 Today
The first step in planning for today’s increasing longevity is to meet with your financial professional for a retirement income consultation. Your financial professional can help you:
- Assess your retirement income needs
- Identify your retirement income sources
- Put together a plan for protected lifetime income you can’t outlive—even if you live to 100 or beyond
Contact your financial professional to get started.
1 AIG 2019 Plan for 100SM Survey was conducted online within the United States by Dr. Michael Finke of The American College of Financial Services in December 2018 and January 2019 among 1,012 U.S. adults age 45-74 who have at least $50,000 in retirement accounts.
2 Alliance for Aging Research, “Celebrating Centenarians and Studying Longevity,” July 8, 2016
3 U.S. Department of Health and Human Services and U.S. Department of Commerce, “Centenarians in the United States,” July 1999; National Center for Health Statistics, “Mortality Among Centenarians in the United States, 2000-2014.”
4 Centers for Disease Control, Health, United States, 2017.
5 Society of Actuaries 2012 Individual Annuitant Mortality Tables (Age Nearest, with Scale G mortality improvement).
6 AIG “Live Longer, Retire Stronger”, 2008.
7 AIG 2019 Plan for 100SM Survey.
8 AIG 2019 Plan for 100SM Survey.
9 AIG 2019 Plan for 100SM Survey. Q: Briefly describe what worries you about spending from your retirement account investments instead of from a pension or a product that provides protected monthly income for life?
10 AIG 2019 Plan for 100SM Survey.
11 AIG 2018 Income Savvy Survey.
12 AIG 2019 Plan for 100SM Survey. Q: Think about how you may pay for your expenses in retirement. One way is to spend from the stocks, bonds, and cash you have in your retirement savings account. These investment accounts may rise or fall as the result of market volatility. Another way is to trade a portion of your retirement savings for a protected monthly income that’s guaranteed for life. How would receiving a protected monthly income for life affect how you feel about spending money on things like eating out with friends or going on vacation?