Longer lives reinforce financial security needs

May 26, 2023


As the number of centenarians surges, having sufficient retirement income could become even more important.

The following is an excerpt from Jackson’s new white paper: Is 100 the New 70? To download the full paper, click on the link below.

Many of us will likely live far longer than we ever thought possible. Even the COVID-19 pandemic, while concerning, is a blip on the overall longevity radar screen and actually has led to medical advances expected to contribute to longer life expectancies.1

Research by the University of Washington determined the current record of a 122-year lifespan will be almost certainly broken by the end of this century.2 It’s not difficult to visualize this occurring much sooner. After all, the number of centenarians has been increasing for decades and is expected to continue to do so.3 And age 100 could be the new 70 as soon as the next decade.4

There’s evolving science tied to key fundamentals for health and vitality that most of us learned as children. Sixty-three percent of U.S. adults consider the scariest aspect of aging to be a potential decline in health.5 This reinforces the value of applying the science as we focus on the basics of moving more, eating well, getting plenty of sleep, and properly managing stress. Doing so will not only support greater longevity, but also help ensure we can enjoy a vibrant life—rich with many of the opportunities the future and retirement hold.

But financial worry can be a top stressor—one that’s often chronic.6 Because mental health and financial health are closely linked,7 financial well-being is another key aspect to SuperAging.

 

To learn more about SuperAging, read Jackson’s latest white paper

Jackson’s Is 100 the new 70? white paper examines the rapid growth in longevity anticipated and the scientific advances behind it. The paper explores the importance of keeping healthy by focusing on the foundational areas of sleep, movement, nutrition and stress. Click here to download the paper.

 

For financial professionals and their clients, the message is clear — it’s essential to prepare mentally, physically, and financially for very long lives and having sufficient retirement income will be even more important. It’s not surprising research consistently shows many Americans have intense fear of not having enough income in retirement. In one recent survey, 87% of respondents said it was their top fear.8

At the same time, the American Academy of Actuaries calls the widespread assurance of lifetime income “the single most important step needed to improve the retirement security of older Americans.”9

Options for protected lifetime income like pensions aren’t as common as they once were. Then there’s Social Security, which was designed to replace only about 40% of income for the average retired worker. But it’s relied on more heavily by many people because they lack other sources of guaranteed lifetime income.10

Annuities can be an option to consider when addressing longevity risk—the risk of outliving one’s savings. A broad range of these retirement products is available today, offering more choices and greater flexibility to accommodate changing economic conditions and evolving investor needs. These needs may involve supplementing retirement income, preserving principal, or building a more diverse retirement portfolio.

Jackson’s own research found annuities may improve how people perceive and experience their retirement.11 Amid today’s longer life spans, the heightened economic uncertainty we’re experiencing only reinforces the value of securing a source of protected lifetime income. While there’s a bounty of products out there designed to minimize risks, an annuity can help eliminate the risk of running out of money.12 With an annuity, you can decide how much risk you are comfortable with and how much of your income is protected.

The share of financial professionals who would not recommend an annuity is shrinking.13 Additionally, 90% of registered investment advisors (RIAs) whose clients own annuities agree or strongly agree that guaranteed lifetime income makes their clients more confident in their retirement plans, which can help them relax.14

This can free them to focus more on enjoying today’s longer retirements and even the possibility of living 100 years or more.

 

Plan for a healthy wealth span

As we seek to live longer and healthier lives, ensuring your retirement plan can provide the financial freedom you need is even more important. Click here to determine if your financial plan is retirement ready at Jackson’s Find Your Path holistic retirement planning microsite.

 

What are annuities?

Annuities are long-term, tax-deferred vehicles designed for retirement. Variable annuities involve investment risks and may lose value. Earnings are taxable as ordinary income when distributed. Individuals may be subject to a 10% additional tax for withdrawals before age 59½ unless an exception to the tax is met. Add-on benefits are available for an additional charge to that of a variable annuity.

1. David Colander, The Wall Street Journal, “Covid Will Increase Life Expectancy,” July 28, 2021.

2.  Eckart, UW News, “How long can a person live? The 21st century may see a record-breaker,” July 1, 2021.

3. Ibid.

4. Julie Blim, CBN.com, “Aging in the Future Never Looked Better,” accessed September 24, 2022.

5. Alena Hall, Forbes Health, “53% of U.S. Adults Don’t Fear Growing Old - Study Finds People Actually Fear Less As They Age,” October 19, 2022.

6. Purdue University News, “Mental well-being inherently connected to financial wellness,” January 27, 2021.

7. Ibid.

8. Gabrielle Olya, Yahoo Finance, “40% of Americans Fear Retirement More Than Death — Here’s Why,” July 28, 2021.

9. American Academy of Actuaries, “Lifetime Income Initiative,” accessed September 26, 2022

10. Social Security Administration, “Social Security Fact Sheet,” 2021.

11. Jackson, “A Holistic Look at Annuities,” research study, 2020.

12. Alliance for Lifetime Income, “Reducing Retirement Uncertainty And Stress,” accessed November 2022.

13. RetireOne, “Lifetime Income or a Fully Stocked Wine Cellar,” 2021.

14. Ibid.

Jackson, its distributors, and their respective representatives do not provide tax, accounting, or legal advice. Any tax statements contained herein were not intended or written to be used and cannot be used for the purpose of avoiding U.S. federal, state, or local tax penalties. Tax laws are complicated and subject to change. Tax results may depend on each taxpayer’s individual set of facts and circumstances. You should rely on your own independent advisors as to any tax, accounting, or legal statements made herein.

Jackson® is the marketing name for Jackson Financial Inc., Jackson National Life Insurance Company® (Home Office: Lansing, Michigan),  and Jackson National Life Insurance Company of New York® (Home Office: Purchase, New York). Jackson National Life Distributors LLC, member FINRA.