Page 60 - FOP JUNE Newsletter

Longevity and your pension: what you need to know
Public pay and benefits have been under at- tack. Global uncertainties and the past finan- cial crisis have altered the conditions for indi- viduals to achieve their financial goals. Over the next few months, Beacon Financial will provide information to help you understand how these various conditions affect your fi- nances.
The first item to discuss is longevity.
Lately, pensions and social security have become a
hot topic. When social security was implemented in 1935, the average age to begin collecting was 65 – and most Americans did not live past 70 years. To- day, the average life expectancy in the U.S. rose to
a record high of 78.8 years in 2014. AccordingtoanarticlebyCBSNews,50percent
such as unforeseen health issues. For this reason, every investor should seek to make plans for the following sce- narios:
• Living beyond expected age: The good news is you live longer. The bad news is you need a longer income stream. If you’ve set aside additional assets for this scenario, your financial situation will be secure. Living to expected age: If you have planned to live be- yond your expected age, but don’t, then your benefi- ciaries will receive more money.
RANDY LANDSMAN
Finance
•
•
Living shorter than expected age: Sadly, life gives us health situations and events we cannot foresee or prevent. If you planned to live longer than ex- pected, then you have ample assets – such as life
insurance – to pass on to your beneficiaries. Regardless of your decision, be sure to keep all your important documents up to date, includ- ing your will and beneficiary information. In a court of law, beneficiaries listed on investment accounts will always trump your will (cbsnews.com/news/living-too-
long-is-a-risk/). d
Randy Landsman, CEO, founded Beacon Financial in 1996. Beacon Financial helps law enforcement employees plan for retirement with a main emphasis on financial guidance and education seminars.
of the nation’s couples will have one spouse that
lives to 90 years old, or beyond. Think about the overall costs of providing that person’s pension. Now, add that to the cost of health insurance and cost of living adjust- ment.
Longevity risk may seem like an oxymoron, because living a long life is not typically considered a risk. We all want to live longer, but it takes more money. The real risk is not having enough for retirement and other expenses
60 CHICAGO LODGE 7 ■ JUNE 2016