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Planning for the Long Haul: Where You Live Could Impact Your Retirement Lifespan
Retirement isn’t just about saving enough; it’s also about preparing for how long those savings need to last. The length of your golden years directly affects expenses like housing, healthcare, food, travel, and leisure activities. Knowing which states offer longer (or shorter) lifespans for retirees can be a game-changer for confident financial planning.
This article delves into the states where retirees tend to enjoy the longest post-65 years, those with shorter lifespans, the factors contributing to these differences, and crucial strategies for incorporating longevity into your financial blueprint.
Understanding Retiree Life Expectancy
In the U.S., individuals reaching age 65 can, on average, anticipate living to approximately 84.5 years old, translating to roughly 19.5 years of retirement that require financial backing. However, this national average masks significant variations across states, with some locations offering additional years beyond 65, while others fall considerably below the norm.
Life expectancy after age 65 isn’t solely determined by genetics. It’s a complex interplay of long-term lifestyle choices, access to quality healthcare, environmental conditions, robust social support networks, and more. Essentially, where you choose to live (or retire) can significantly influence the number of healthy years you’ll enjoy.
States Where Retirees Live the Longest
Here are the states boasting the highest life expectancy after age 65:
- Hawaii: 20.5 years after age 65
- Connecticut: 19.8 years
- New York: 19.8 years
- Massachusetts: 19.7 years
- California: 19.7 years
- Minnesota: 19.6 years
- New Jersey: 19.6 years
- North Dakota: 19.5 years
- Vermont: 19.5 years
- South Dakota: 19.4 years
- Colorado: 19.4 years
- Rhode Island: 19.4 years
- Florida: 19.4 years
Retirees in these states can generally expect about one extra year of life compared to the national average. Hawaii stands out with over two decades beyond 65, while several states in the Northeast and on the West Coast follow closely.
States Where Retiree Lifespans Are the Shortest
Conversely, these states exhibit the lowest life expectancy after age 65:
- West Virginia: 16.6 years after age 65
- Mississippi: 16.7 years
- Kentucky: 16.8 years
- Oklahoma: 16.8 years
- Arkansas: 17 years
- Alabama: 17.1 years
- Tennessee: 17.2 years
- Louisiana: 17.5 years
- Indiana: 17.7 years
- Missouri: 17.8 years
- Ohio: 17.8 years
Retirees in these states may experience, on average, two to three fewer years of life past age 65 compared to those in the top-ranked states. Many of these are Southern or Midwestern states often associated with higher rates of chronic diseases and more limited access to certain forms of preventive care.
Why These Differences Matter
The variations in retiree longevity are not random; they reflect tangible disparities in:
- Healthcare Access and Quality: States with superior access to preventive care, specialized medical professionals, and early diagnostic tools tend to keep older adults healthier for longer.
- Lifestyle Patterns: Regional differences in diet, physical activity levels, smoking rates, and obesity prevalence significantly influence long-term health outcomes.
- Economic and Social Supports: Income levels, educational attainment, community networks, and the availability of social services all play a role in longevity trends.
- Environmental Factors: Air quality, urban walkability, and exposure to pollution also contribute to these patterns.
Understanding these contributing factors helps retirees contextualize state-level life expectancy data and set appropriate financial expectations. For many, living longer than anticipated can strain savings, particularly as healthcare costs escalate with age. Here’s how to integrate longevity into your financial planning:
Build a “Longevity Buffer”
Assume you could live into your early 90s or even beyond. Planning for 25+ years of retirement makes your financial strategy more robust should you indeed achieve that longevity. Remember to factor in required minimum distributions from your 401(k) and other retirement accounts.
Prioritize Health-Sensitive Expenses
Don’t overlook the escalating costs of healthcare, including Medicare supplements, potential long-term care, and out-of-pocket medical expenses. Healthcare is often one of the most substantial expenses in retirement. Fidelity estimates the average retiree could spend $172,500 on healthcare throughout their retirement.
Revisit Your Investment Strategy
Longevity risk might warrant a diversified investment approach that balances growth with stability as you progress through retirement. While stability is crucial, if you anticipate 20+ years of retirement, prioritizing growth during the early retirement years could be beneficial.
Consider Geographic Costs of Living
States with higher life expectancies can also come with higher costs of living. It’s essential to weigh longevity against the overall cost dynamics of retirement.
Living longer and paying more significantly increases the risk of outliving your savings. Ensure this is a key consideration in your retirement plan.
Use Social Security Timing Strategically
Delaying Social Security benefits can increase your monthly income, potentially helping to cover costs if you live longer than average. If you have a family history of longevity and reside in a high-life-expectancy area, consider delaying your benefits for a few years to maximize your monthly payout.
The Bottom Line
While your place of residence can influence the potential duration of your retirement, no state-level average can precisely predict your personal outcome. The crucial takeaway is to plan for a longer-than-expected retirement horizon. This ensures your savings, healthcare strategy, and income sources are flexible enough to prevent financial strain.
The Social Security Administration estimates that roughly one in three 65-year-olds today will live to age 90, with a significant portion reaching their mid-90s. Achieving this level of longevity doesn’t demand perfect health or flawless planning, but it does necessitate building in an extra financial cushion. After all, a retirement that extends five or ten years beyond expectations is often where financial stress first appears.