Longevity, gender muddy retirement planning

U.S. symposium explores current trends

With increased life expectancy and rising healthcare costs, employers and governments are faced with new opportunities and challenges, according to discussions at the 2008 Living to 100 Symposium in Orlando, Fla., sponsored by the Society of Actuaries of Schaumburg, Ill.

“The implication of longevity is a huge blind spot for employers, especially since many individuals are looking to retire at age 65 like their parents did before them,” said Valerie Paganelli, senior consulting actuary with Paganelli Consulting.

There are also considerable differences between men and women, said Beverly Orth, principal with Mercer.

“The framework for retirement is based on men’s longevity and retirement needs. Since women on average earn less than men, the current practices aren’t enough for women and their increased likelihood of living longer. If we created a framework that works for women, it could be applied to men’s retirement as well.”

But there’s a Catch-22, as individuals need to manage their resources for the rest of their lives but don’t know how long to expect to live, said Steven Vernon, president of Rest-of-Life Communications.

“This is further compounded by the number of individuals taking a lump sum, but not planning accordingly to make it last through their entire retirement,” he said.

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