The Tooth Fairy Only Visits Children and Other Retirement Myths by Robin Trimingham
Is it more likely that you will lose your teeth or run out of money in retirement?
You might wonder why I am even asking this, but medical science has increased life expectancy in the western world to such an extent we need to start thinking about all the ways in which walking the planet for more years than our ancestors will affect us.
I tried asking google for an answer to this question today but “she” got coy with me and snapped back with about 14 million off-topic references to retirement planning – I guess there are still a few things that she doesn’t know!
Rather than admit defeat, I decided to tackle the question another way and simply ask how likely it is that you can keep your teeth for your entire life.
This yielded an answer. According to a Swedish study which was conducted over a forty-year period, people are keeping their teeth for longer than ever before due largely to advances in dentistry, oral hygiene and the availability of dentistry. As you might expect, gum disease is still the number one cause of tooth loss, but gum health has increased so dramatically that a person in their sixties now has approximately the same overall gum health as a person in their forties did in 1973.
Meaning that if you brush, floss and go for regular dental appointments there is a good chance that your natural teeth can last 100 years or more.
Can the same be said about your retirement nest egg?
Given that the typical retirement age is still 65, what I am really asking is whether it is realistic to self-finance thirty-five years of retirement life. What I learned is that it is quite feasible, but you must view your life lasting this long from the outset and plan accordingly.
This cosmic shift in financial planning will lead you to think not in terms of “how much can I spend per year in retirement” to a more conservative “what can I do to maximize savings and avoid spending capital for as long as possible in retirement”.
Taken from this perspective you would do things like:
• Turning down offers of early retirement in favour of staying at your job and continuing to accumulate your company pension
• Avoid commencing pension benefit payments before age 70 if you don’t really need the cash
• Delay government pension benefits until age 70 if you have other sources of income
• Plan to do something that generates some income once you leave your place of employment
• Figure out how much your fixed monthly expenses are (food, accommodation, utilities, transportation, insurance) and only withdraw that amount each month. This is not to say you won’t have any extras, but it will put you in the habit of considering the merit of each expenditure before you reach for your wallet
• Move somewhere where the cost of living for the lifestyle you want is less than where you currently live and save the surplus in an interest-bearing account for later in your life
• Adopt a very healthy lifestyle (staying healthy is much cheaper than being sick)
• Brush and floss daily (just a wee joke to see if you read all the way to the end!)
Will you be more likely to lose your teeth or run out of money? The odds are that if you take care of yourself throughout your life as if you are going to live to be 100, then your chances of arriving at the finish line with both are within your grasp.
By Robin Trimingham