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Will Declining Life Expectancy in the U.S. Affect Your Retirement Plan? Thumbnail

Will Declining Life Expectancy in the U.S. Affect Your Retirement Plan?

U.S. life expectancy is trending in the wrong direction for the first time in decades. According to data from the Center for Disease Control, in 2014 the average American was expected to live 78.9 years. In 2021, after several years of plateauing life expectancy, that figure dipped to 76.1 years, the sharpest 2-year decline in over 100 years.

From a financial planning perspective, Keen Wealth still believes that folks need to prepare for a retirement that's going to last, potentially, decades. But this latest life expectancy data does raise some important issues about what we can do both individually, and in our communities to turn these trends around so that we can all enjoy our golden years to the fullest.

1. Why is life expectancy dropping?

According to a report from the Bloomberg American Health Initiative at the Johns Hopkins Bloomberg School of Public Health, COVID-19 was the leading contributor to the decline in life expectancy from 2014 to 2021. One could assume that the pandemic also played a part in driving up numbers for contributors such as overdoses, heart disease, and suicides.

Overall declines in life expectancy, between 2019 and 2021, have been greater for Black Americans (-4.0 years) and Hispanic Americans (-4.2 years) than for White Americans (-2.4 years). And there remains a significant gap in life expectancy between women (79.1 years) and men (73.2 years).

2. What can we do? 

Another study by the National Center for Health Statistics also points to COVID-19 as the most significant contributor to declining life expectancy. But interestingly, this study also shows significant decreases in deaths from influenza, pneumonia, Alzheimer's, Parkinson’s, and perinatal diseases. Continuing to support medical researchers and groups like the American Cancer Society and the American Parkinson Disease Association could contribute to an even further decrease in deaths caused by these conditions. Hopefully, advances in detecting, preventing, and treating COVID-19 will reduce its impact on future life expectancy studies as well.

We can make similar investments in our own health by using the health care benefits we all work so hard to secure. Younger, healthier Americans need to remember that the best medicine is preventative, so don't forget to schedule those annual checkups. Retirees need to make the most of their Medicare benefits, which include many free screenings.

One of those screenings is for mental health. While public discourse around things like depression and anxiety has improved in recent years, many folks are still too ashamed or embarrassed to talk about these feelings and get the help they need. Retirees can be especially susceptible to feelings of depression as they transition away from their careers. Please reach out to a doctor or loved one if you're having hurtful thoughts. And make yourself available to the people in your life who might be struggling with their own mental health or problems with addiction.

Finally, if you've been feeling closed off from the world since the pandemic, it's time to get back out there! Connect with people in your personal life and in your community. Build up a new exercise routine. Shop at local farmer's markets and learn to cook healthier meals. Volunteer at local nonprofits or community centers that are helping folks in need get better access to health care and good food. The small, positive steps you take today can ripple out and improve life for yourself and for people around you.

3. What should I plan for?

Keen Wealth's Matt Wilson shared an interesting stat during a recent webinar: once a person reaches age 65, their life expectancy increases slightly compared to the previous year. And despite the latest life expectancy trends, many experts believe we're going to see an increase in centenarians in the near future.

It's this vision of a longer, more active second half of life that Keen Wealth is committed to helping folks realize. If you’re an optimist like I am, you probably look at the positive signs in the data I’ve discussed today and see problems that we can all work together to solve as we move further and further away from the pandemic’s fallout. And if you focus on the things you can control about your longevity and your financial planning, you’ll be prepared for many, many fulfilling years in retirement.

About Bill

Bill Keen is a financial advisor with nearly 30 years of industry experience. As the founder and CEO of Keen Wealth Advisors, a registered investment advisory firm, he focuses on providing personalized retirement planning designed to help people thrive before and during their retirement years. With a passion for educating others, Bill regularly blogs about retirement planning, hosts the podcast Keen on Retirement, and has contributed to Forbes, U.S. News and World Report, Reuters, Wall Street Journal’s Market Watch, Yahoo Finance, and other publications. Based in Overland Park, Kansas, Bill and his team work with clients throughout the greater Kansas City area and across the nation. To learn more, connect with him on LinkedIn or visit www.keenwealthadvisors.com.

KWMG, LLC’s dba Keen Wealth Advisors (“company”) is an SEC Registered Investment Advisor located in Overland Park, KS. The company and its representatives may only conduct business in those states where registered or where excluded/exempt or from licensure. For registration information please contact the SEC or the state securities regulators for the states where the company is notice filed. A copy of the company ADV is available upon request. Advisory services are only offered to clients or prospective clients where the company and its representatives are properly licensed or exempt from licensure. No advice may be rendered by the company unless a client service agreement is in place. This information is not intended to be investment advice or construed as a recommendation or endorsement of any particular investment or investment strategy and is for illustrative purposes only. Clients and prospective clients must consider all relevant risk factors involved with each strategy, including costs or fees, and their own personal financial situations before trading.

The views outlined in the book, Keen on Retirement Engineering the Second Half of Your Life, are those of the author and should not be construed as individualized or personalized investment advice. Any economic and/or performance information cited is historical and not indicative of future results. Economic forecasts set forth may not develop as predicted.

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