Fun With Charts!
Life expectancy probabilities
While the good news is we’re all living longer, the bad news is we’re all living longer. Yes, it’s a bit of a dichotomy, but please read on to better understand how and why.
In the not-so-distant old days, retirees worked until age 62, got a handshake and the proverbial (or actual) gold watch, started collecting Social Security benefits, and didn’t count on an extended retirement. In contrast, the chart below1,2 shows that extended retirements are what a lot of us are likely to achieve.
For example, if you’re a 65-year-old non-smoking woman in excellent health, a surprising 11% of you will live to age 100. (100!) And if you’re a non-smoking 65-year-old man in excellent health, 6% of you will also live to age 100. Taken as a couple, 16% of non-smoking couples (aged 65) will have at least one member live to age 100. (So much for planning for 20-year retirements.) From an investment perspective, investing for the long-term is both necessary and required, with emphasis on the phrase ‘long-term.’
I’ll work at my job until they carry me out
Statistically speaking, that’s unlikely to happen. (They might carry you, but it would be part of a reorganization. And you’ll be alive, though probably a bit cranky.) 69% of workers expect to work until age 65, though only 39% do. And the chart3 below explains why it’s likely you’ll retire earlier than planned.
Work duration is a significant issue. If you plan on working for an additional X number of years and plan on saving Y amount of dollars each of those years, working less than X means it’s likely you’ll save less than Y. From a planning perspective, this is where contingencies enter the picture. You may, for example, have to work at a second (or third, or fourth) career. You may even have to work part-time instead of full-time.
Unfortunately, you may not know any of these things until you’re at, or near, the end of your career. And that helps to explain why financial planning is so fluid in nature; we don’t always know how the future will unfold until it unfolds. Retirement planning is all about contingency planning.
When it comes to saving, start early, and don’t stop
If you’re young and you’ve read this far, we tip our hats to you. It would be understandable if a twenty-something, or thirty-something (but not a forty-something!) read the words ‘retirement’ and ‘longevity’ and said: “Get me out of here.”
But if you stuck around, you’re probably one of those people who is a ‘consistent saver & investor,’ a person who understands the long-term benefits of investing early, and consistently.
As can be seen above4, ‘Consistent savers & investors’ who start saving (and investing) at age 25 and continue through age 65, have more assets than their counterparts who: (a) start saving later; (b) start saving early and then stop; (c) start saving early and consistently, but don’t invest their savings for the long haul. (An example of conservative saving vs investing is buying a CD vs investing in the stock market.)
Playing it safe may be a strategy, but it’s generally not the winning strategy for growing a pot of money that will last through retirement. Younger investors, especially, have the time to withstand the multiple ups and downs that come with investing. Much like the expression Ron Popeil used when selling Ronco Showtime Rotisseries on late-night TV in the 90s and early 2000s, “set it and forget it” is a good strategy for younger investors when it comes to retirement. (Just to clarify: instead of buying rotisseries, buy mutual funds and exchange-traded funds.)
1 “Life expectancy probabilities,” Slide 4, Guide to Retirement, J.P. Morgan. 2026.
2 “Life expectancy probabilities, same sex couples,” Slide 5, Guide to Retirement, J.P. Morgan. 2026.
3 “Managing expectations of ability to work,” Slide 6, Guide to Retirement, J.P. Morgan. 2026.
4 “Benefit of saving and investing early,” Slide 15, Guide to Retirement, J.P. Morgan. 2026.
S.F. Ehrlich Associates, Inc. (“SFE”) is a registered investment advisory firm in New Jersey that offers investment advisory, financial planning, and consulting services to its clients, who generally include individuals, high net worth individuals, and their affiliated trusts and estates. Additional disclosures, including a description of our services, fees, and other helpful information, can be found in our Form ADV Part 2, which is available upon request or on the SEC's website at www.adviserinfo.sec.gov/firm/summary/121356.
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