Financial advisors spend a great deal of their time talking to clients about a specific question: “Will I run out of money?” As a result, few issues get more attention than the sustainable withdrawal rate in today’s environment.

But new research suggests that for many clients, an equally pressing topic of conversation should be: “How can I enjoy life in my 60s, before health issues creep in?”

A variety of articles and research reports have been published recently examining the increase in life expectancies and the length of time that retirees can spend really enjoying retirement.

A Merrill Lynch & Co. Inc. survey of affluent Americans ages 46 to 64 describes baby boomers as “not your parents’ retirees.” Compared with their parents:

– 86% of boomers plan a more active lifestyle;

– 84% say their retirement lifestyle will look different;

– 72% expect a higher standard of living;

– 70% plan to keep working; and

– 32% expect to achieve additional professional success.

Underpinning this trend is a remarkable expansion in life expectancy (the average age a person can expect to achieve, given prevailing circumstances) that began in the 1880s and has slowed only slightly. For example, average life expectancy in Western Europe and North America has grown from 26 years in 1100 to 78 this year.

A recent article in The Atlantic asks: “What happens when we all live to 100?” This article depicts the inexorable increase of three months per year in life expectancy since the 1800s, then explores the implications of an aging society, using the example of what’s happening in Japan, today’s “greyest” country.

The Atlantic article devotes considerable attention to the research taking place on how our minds and bodies can stay healthy as we age, and suggests that boomers increasingly will be more concerned about their “healthspan” than their lifespan.

Meanwhile, in October, an article in the Wall Street Journal noted new mortality estimates released by the Society of Actuaries: the average 65-year-old American woman is expected to live to age 88.8, up from 86.4 in 2000; while men at age 65 are expected to live to 86.6, up from 84.6 in 2000. This article goes on to discuss the serious implications of expanding life expectancy for traditional, defined-benefit pension plans, with rising life expectancy increasing pension liabilities by an average of 7%.

Planning for the “glory decade”

The issue of healthy longevity was addressed in the National Post by actuary Fred Vettese beneath the headline: “Why our 60s are our glory decade.” Vettese makes the case that many of today’s boomers have a narrow window in which to enjoy travel and other pursuits in retirement before health issues kick in. Tapping into European data (and it’s hard to argue that the average Canadian is healthier than the typical European), he points out that today, the average 50-year-old European man can expect to live to 79; 84 for women. But by age 67 or 68, Europeans will experience disabilities that will limit them.

“The average European woman who is age 50 can expect to live another 34.3 years,” Vettese writes, “but a startling 16.2 of those years will be marred by disability that will moderately limit activity for an average of 10.1 years and severely limit activity in the last 6.1 years.

“The story for men,” he adds, “is similar, with the average 50-year-old European man expecting to live another 29.4 years, of which 12 will be spent with moderate or severe disability. Hence, a 50-year-old European can expect to live disability-free to 68 in the case of women and 67 in the case of men.”

Based on these data, Vettese suggests, many boomers have a “glory decade” in their 60s, during which they have the time, the means and the health to pursue their dreams. That’s not to suggest that some boomers won’t travel well into their 70s and 80s, but those people will be the exceptions rather than the norm.

Many clients are out of touch with reality on this issue. A study by Merrill Lynch released this past September entitled Health and Retirement: Planning for the Great Unknown points out that 80% of boomers expect their generation to be healthy and active at age 75. A counterpoint to this expectation is research among retirees, among whom 55% had retired earlier than expected. The No. 1 reason for earlier than planned retirement, representing almost 40% of cases: health issues.

Go-go, slow-go, no-go

This trend has some fundamental implications for retirement planning. Author Michael Stein popularized a method of categorizing retirement into three phases: “go-go,” “slow-go” and “no-go.”

Last spring, American financial planner Michael Kitces discussed some new research on spending in retirement relating to these three phases, examining the concept of “the retirement spending smile.”

Raising this topic with your clients who are in their 50s and 60s can be tricky. After all, nobody wants to be told that they have only a narrow window during which to enjoy life fully. Furthermore, talking about averages flies in the face of many clients who believe that the averages apply to other people but not to them. (Clients whose parents or siblings have run into health issues at an early age may be exceptions.) All of that said, for most clients, it would seem to make sense to bump up discretionary spending for their 60s.

Of course, no one wants to be the bearer of bad news. That’s why some advisors give their retiring clients books outlining research on how to lead happy, healthy lives in retirement.

One of the most widely followed books in this genre is Younger Next Year: A Guide to Living Like 50 Until You’re 80 and Beyond. Co-written by Chris Crowley, retired managing partner of a New York law firm, and Henry S. Lodge, a professor at Columbia Medical School, this book was excerpted in Fortune magazine when first published in 2005. The book focuses on five deceptively simple principles:

1. Exercise six days a week – seven, if you can.

2. Eat what you know you should – and cut out the crap.

3. Spend less than you make.

4. Connect with other people.

5. Feel passionate about something.

Another popular resource is Blue Zones: 9 Power Lessons for Living Longer, by Dan Beuttner. This book, published by the National Geographic Society, identifies “blue zones” – regions with the largest pockets of long-lived, disability-free residents – in Italy, Japan, Mexico, Costa Rica and Southern California. This book offers readers similar advice to that offered in Younger Next Year, with a focus on physical activity, healthy eating and community involvement.

So, how can your boomer clients fund their “glory decade”? As I was finishing this column, I came across an article by the New York Times’ Ron Lieber entitled “Parents, the Children Will Be Fine. Spend Their Inheritance Now.”

Lieber’s first suggestion is that parents divert future bequests to invest in memories today. Part of the rationale for this strategy is research showing that among parents ages 59 to 96, 86% expect to leave a bequest. But just 45% of their children’s generation, ages 40 to 60, think they will get one.

Whatever solution you recommend, engaging your clients in conversations about a “glory decade” and the implications of an average “healthspan” that is shorter than most boomers expect can be tricky. But it is precisely through this type of conversation that good financial advisors add the most value.

Dan Richards is CEO of Clientinsights ( in Toronto. For more of Dan’s columns and informative videos, visit

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