Ready For Retirement
Ready For Retirement
Retiring at 65 Might Be Too Late (Here’s Why)
Most retirement plans focus on money alone, but the equation is incomplete without factoring in healthspan. Lifespan is how long someone lives, but healthspan is the number of years spent in good physical and cognitive health. The gap is significant. The average American lives to 77, but healthspan often ends around 66.
This creates a retirement paradox. Many professionals work into their mid-60s to maximize Social Security and retirement accounts, only to discover declining health limits the freedom they saved for. The financial benefits of working longer are measurable, but the hidden costs are just as real: strained relationships, stress-related health problems, and missed life experiences.
True retirement planning goes beyond asking “Can I afford to retire?” The real question is “What is the cost of not retiring?” For those financially secure, continuing in a stressful job can shorten healthspan and diminish quality of life.
The hardest retirement stories are not about running out of money. They are about running out of health before enjoying the freedom that was earned. A strong plan considers both financial security and healthspan, ensuring not just wealth in later years, but the ability to create memories when they matter most.
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The strategies, case studies, and examples discussed may not be suitable for everyone. They are hypothetical and for illustrative and educational purposes only. They do not reflect actual client results and are not guarantees of future performance. All investments involve risk, including the potential loss of principal.
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What if retiring at 65 means you only get five good years of retirement before your body starts saying no? What I'm referring to here is the difference between lifespan and healthspan, and that's why I want to show you in today's video how waiting until full retirement age might cost you more than just time. It might cost you some of the best years of your life. So to illustrate that, let's clearly define both these terms I'm talking about. I'm talking about lifespan, I'm talking about healthspan. Your lifespan is how much more time do you have until you pass away? That is a number that so many of us think about. I'm going to retire in my 60s. I'm going to live until my 80s or 90s. That's your lifespan, but your healthspan is very different. Your healthspan is the number of years lived in good physical and cognitive condition. Now here's a stat to keep in mind the average American lives until age 77, but they only have a health span until age 66. Now, obviously, we're talking about averages here, and averages are going to be different for everybody, but these are very important things to understand because they are going to relate in very specific ways to each of your individual retirements. So, as we start to look at our health span, health span defined as the period of life spent in good health, free from chronic disease and disabilities of aging. Sure, the average American's lifespan is 77, but the health span is 66. Why is that relevant to retirement? Retirement's all about money and planning and preparing. Yes, what are we planning and preparing for, though? We're preparing for the ability to have a healthy, a productive, a fulfilling, a purposeful retirement. It's very difficult to do that when you no longer have your health, and one more point to consider to really drive this home is when I talk about a life expectancy of age 77, that is what it is for the US, but that's from birth, meaning the day you're born your average life expectancy is 77. If you have already reached the age of 60, then your life expectancy is actually 84. Specifically, if you're a woman and you reach the age of 60, your life expectancy is 85. And if you're a man, your life expectancy is 82. So, beyond that 77 average that we're looking at, here's how this ties into your retirement plan.
Speaker 1:If you've run a financial projection before, either on your own or with a financial advisor, you've probably seen something that looks just like this. Well, this is showing you is every single year from today until the age at which you're projected to pass. Here's your portfolio balance and ideally, that portfolio balance lasts all the way and is continuing to grow, even throughout your retirement, all the way up until you're passing. So we look at this and what we focus on, if you look at this again, is this far right-hand side. What I want to see is do I have money that's met my income needs throughout retirement and at the end, do I still have something in case I keep living longer, in case there's a terrible market, in case I want to pass money on to children or grandchildren, whatever it is? That's the point that we're focused on, but that's the wrong focus in a lot of ways. Yes, we want to make sure we have money left for the rest of our life, but this is where we really should be focused. How do we make sure that we're putting our portfolio, that we're looking at our financial plan, in the proper context, which is your portfolio's ability to support you is going to look very different in the early years of retirement assuming you have your health and your vitality and your energy than it is in the latter years of retirement. It's not saying in one case you need portfolio and in one case you don't. You absolutely need it. But if all we're looking at is maximizing the terminal value, what are we sacrificing today to do that? What are the costs of continuing to work, continuing to have that toll taken on our bodies, if it's sacrificing the best years of our retirement in order to build up more money for the latter years of our retirement? Where order to build up more money for the latter years of our retirement where we're not able to do that much anyways?
Speaker 1:I've had clients who kept working until their mid to late 60s, even though they could have retired much earlier, and they say you know what I'm doing this? Because when I do retire I'm going to be able to take the best trips in the world, I'm able to do whatever I want, join the nicest country clubs. But by age 70, the knee replacement, the chronic illness, the lack of energy prevented them from actually doing some of these things. They sacrificed their earlier years of retirement to make more money, but they couldn't actually use the extra money and translated it into any higher quality of life. The best years of their retirement passed them by because they didn't prioritize the things that mattered when they mattered and they only focused on one aspect of their retirement plan. So my question to you is what's the cost of a delayed retirement? Is it missed time with kids and grandkids while you still have the ability to be active? Is it missed trips that you and your spouse could have taken but you might not get the opportunity to take in the future? Is it the missed time that you could have taken care of your body and your health that you're never going to be able to get back?
Speaker 1:When we think about compounding, we think about it from a financial standpoint. What's the compounding these decisions are going to have when it comes to my portfolio value in the future? Apply that same framework to your health, to your relationships, to your hobbies the things that you're going to do that are actually going to provide purpose and meaning and joy in your retirement. Going to do that are actually going to provide purpose and meaning and joy in your retirement. If we're so focused on the financial side, we cannot invest in the other things, the things that truly matter in our retirement years. The hard part about all this is there's a very tangible reward for continuing to save and continuing to invest. I see the impact of more money going to my 401k of more equity vesting, with my stock compensation of one more bonus coming through. That's a very clear scorecard that I can track. What I can't see is a scorecard for relationships, for health, for purpose, for contentment. Those are some things that are invisible but far more meaningful.
Speaker 1:Now to take a big step back, obviously you need money to make this all work. If you have not saved a dime, this conversation is probably irrelevant. You need to make sure that you're at that place where you are financially independent. But once you are there, ask yourself what's the cost of continuing to do this? If you love work, if you get energized from work, if you have relationships, if there's purpose, if there's structure, keep working. But if you're in a job that's stressing you out, burning you out, pulling you away from the things that actually matter, and you have that financial independence, what is it costing you to continuing to work? What's it costing you to continue to accrue that social security benefit that's getting higher and higher? That feels good, but don't think that it's coming at zero cost. What's the cost to your relationships, your health, your ability to use this finite time? We have here this finite time that's even more finite when we consider our health span and not just our lifespan.
Speaker 1:So, as we're having this conversation, this isn't designed to be a fear-based conversation. You're missing something. What it is designed to be is called action. Can we be intentional with the way we plan for our retirement? Yes, more money is better if it is serving something, if it is serving our ability to do what we want to do. But more money is not better. More money is better if it is serving something, if it is serving our ability to do what we want to do. But more money is not better. More money is actually worse if it means that to get more money, we must sacrifice more more time, more energy, more things we could have been doing in other areas of our life. That's where it's starting to cost us. So what can you do? Well, number one create a financial plan. Work with a financial advisor.
Speaker 1:If you haven't done this on your own, understand what do you need to do. How long do you need to work, how much do you need to have saved to live the life you want to live? So understand what that financial independence number looks like and where you are in relation to it. If you're not already there, how can you get there in a way that allows you ideally to prioritize the things that matter today while also building the financial resources to be in a position to retire in the future? If you are already there, why do you keep working? Work, as I mentioned, can be wonderful. If you love work, if work provides more than just a financial benefit, by all means keep doing it.
Speaker 1:But what I see time and time and time again is that individual who's maybe in their early to mid 60s they're earning more money than they've ever earned they don't love their job. It's taken a tremendous toll on them in terms of their stress levels, in terms of their health, in terms of their ability to be present for their loved ones and do other things. How can you turn away the highest salary you've ever had in your life? How can you turn away one more bonus? How can you turn away maxing out your retirement plans again? How can you turn away accruing more income that's going to maximize your social security benefit and that's correct?
Speaker 1:If the only lens we're looking through is a financial one, why would you turn that away? Maximize this, ride this, optimize this, but that's only one lens, that's only one thing that we need to be looking through, and I've seen far too many clients. I've seen far too many people who have sacrificed the things that actually matter just for more money. They didn't have the health, they didn't have the relationships and, in some really tragic cases, they didn't even have their own life left to enjoy some of these things when it was all said and done.
Speaker 1:So I want you to redefine what wealth looks like for you. Yes, it's finances, but it's also time, it's also relationship, it's also purpose, it's also hobbies, it's your ability to do all the things that lead to a meaningful life. How do you take all these things into account? So, when you look at your financial plan, it's leading to a better life, not just a more well-optimized financial strategy. So, in closing, ask yourself would you rather have more money in your 80s or more memories in your 60s?
Speaker 1:Only you can decide that answer. But the challenge here, the opportunity here, is to say how can you start driving your financial strategy? How can you create a financial plan that supports the life you want to live? Do that on your own, do that with a friend, do it with a financial advisor, but however you do it, do it, make sure that you do these things so that you live a life of intention, a life of purpose, a life that supports what you actually want to be doing, as opposed to drifting aimlessly and getting stuck in this trap of thinking that continuing to work forever, continuing to maximize the financial side of things forever, is somehow magically going to get you to where you want to go.
