Explore the fascinating world of blue zones and the secrets to a long and fulfilling life as Al Smith uncovers research findings on communities that boast high numbers of centenarians. From Loma Linda, California to Okinawa, Japan, these regions offer valuable insights into diet, social connections, and lifestyle choices that contribute to longevity. Additionally, learn how to incorporate these findings into practical retirement planning strategies to maintain both financial security and quality of life in your golden years.
Welcome to Retirement Unpacked with Al Smith, owner of Golden Eagle Financial. You want a retirement plan that alleviates your fears about the future so you know your money will last. As a chartered financial consultant, Al Smith will help you find a balance between the risk and reward of the market and the safety of your retirement income. And now, here’s your host, Al Smith.
SPEAKER 02 :
Welcome to another program of Retirement Unpacked. I want to thank you for tuning in. I’m sure there’s other things you could be doing but I have some good information for you here on today’s program and the information is information that I have provided in the past but it’s so terribly important that probably three or four times a year, I’ll continue to talk about this. And basically, the topic is longevity. How long are we going to live? For example, if we bounce all the way back to Social Security, when it was created in 1935, there was one of the very first recipients was a lady named Ida Mae Fuller. She began receiving Social Security, I think in about 1939, and she continued to draw on it until the 1970s. She paid in about $22 and collected back, I think it was around $22,000. Don’t hold me to those numbers, but it was longevity. that they weren’t really anticipating. Because when Social Security was created, the retirement age was 65. And back then, people didn’t live terribly longer than age 65. And some of the things that are a little bit misleading, that sort of thing about life expectancy, For example, if you look up life expectancy, you will find that in the United States, it’s 78.4 years, and that’s based on 2023, so that’s fairly recent. And now if we break that down into genders, it’s 75.8 years for men, and 81.1 year for women. Now, when they look at this, they’re looking at the median age that people die. And so that’s considering it all the way from birth. On the other hand, what’s probably more useful is if you’re getting somewhere near retirement age, if you’re 65 years old, obviously you can’t die at age 58. So the life expectancy of people who are already age 65 is greater. For men, it’s 84 years, and for women, it’s 87 years. And I’ve also heard that there’s a 25% chance that women who are age 65 will reach age 90. Now, if we, and there’s been significant increases since the 1960s. Many people who suffered heart disease and so forth in the 1960s didn’t make it. But there’s been considerable improvements in the last, well, I guess that’s 65 years. So considerable medical improvements that have extended life expectancy. For example, for couples. There’s a 50% chance that one of the two will reach age 90. That’s quite a stretch. So that’s to be considered when we sit down and do retirement planning. We want to plan for longevity. That’s an important component of retirement planning. 7% chance, it’s a much, much slimmer chance that both parties in a couple who are age 65 will reach age 90. And sometimes people will ask, well, what is the leading cause of death? And the leading cause of death is heart disease. And the leading cause of heart disease, according to medical information and so forth, the leading cause of heart disease is atherosclerosis. And basically that is a hardening of the arteries. That’s plaque forming in the arteries and so forth. And those of you who are taking medication for cholesterol, that’s one of the reasons that you take that. In our health, we want our arteries to be clean because when they get clogged, that’s what results in heart attacks. Are there people who live a lot longer than that? Well, the answer to that is yes. Jean Calment. is a woman who lived in France. She lived there until 1997 when she died. She died at age 122. Historically, she is the longest living person for whom we have any records. And there is also something called blue zones, or there are something called blue zones. There are areas called blue zones. There’s a man who did some research. His name is Daniel Boothner. And he was doing research and learning about why certain people in certain parts of the world live considerably longer than most everyone else. There were a high percentage of nonagenarians. and centenarians. And for those of you who are word files, nonagenarian is someone who reaches their 90s. A centenarian is someone who reaches age 100. The areas of these blue zones include Okinawa, Okaria, which is in Greece. Okinawa, of course, is an island in Japan. Loma Linda, California. Specifically in Loma Linda, California, the Seventh-day Adventists who live there have considerable longevity. Their religion doesn’t cause them to live longer, but their religion directs them to be vegetarians. And their diet and so forth puts them in the category of the other blue zones. Sardinia in Italy is another one of the blue zones. And the Nicoya Peninsula in Costa Rica is another blue zone. And people ask, and when I did a little research, well, do any of these consume alcohol? Well, surprisingly, there’s modest consumption of wine in many of these blue zones. I don’t know if that includes the Seventh-day Adventists or not, but modest consumption of wine was consistent with people who lived in these blue zones. And what they found is that there are strong social connections for folks who live in these blue zones. There’s largely a plant-based diet. And that plant-based diet included vegetables themselves, a lot of vegetables. what are called legumes, whole grains, and nuts. So that was largely a part of their diet. Physical activity, and this doesn’t necessarily mean membership in a gym. I don’t think In the Nicoya Peninsula in Costa Rica, there are a lot of 24-hour fitnesses there. But the point being, their daily activity included a lot of physical activity. And another thing was a sense of purpose for their lives. More specifically about the physical activity, there was some research done that said there is greater longevity when there is vigorous physical exercise as compared with moderate physical exercise. And there’s, as I say, an additional 20 or 30 percent longevity in these blue zones. Something else that they learned is they consume about 20 or 30 percent fewer calories. And one of the reasons for that is the nature of our bodies, how our bodies work. Have you ever noticed when you eat quickly, you don’t feel quite as full as when you eat slowly? And the reason for that is there are hormones that activate the feeling that we experience when we’re full. and eating more slowly will cause you to eat less because it takes about 20 minutes for these hormones to kick in to kick in to let you know that you are full so if you are interested in minimizing weight or maybe losing a little weight or dieting or something like that it’s a rather simple recommendation but if you eat more slowly you will feel full sooner and making it a little bit easier to push some of that exercise or rather some of that additional some of those additional calories push them away from the table so exercise is important the diet is important and the social connections i found that to be really interesting that The thing in common in all of these locations, again, that’s Okinawa, Ikaria in Greece, La Melinda, California, Sardinia in Italy, and the Nicoya Peninsula in Costa Rica. One of the big things they had in common besides diet and exercise was strong social connections and a sense of purpose in their lives. So what does that mean for the rest of us? Well, as a financial advisor who does retirement planning, planning for longevity is just as important as any of the other components of planning, like planning for safety, planning for legacy for the next generation, how that’s going to work, But in my research, Forbes magazine, which along with Kiplinger, I rely on that a lot because they have really good information, good financial information, good retirement information. And Forbes had some of the very keys that are important in planning for longevity. One of those is having long-term care. because you can plan how much income you’re going to need, and you can even do some of the software printouts that will show how likely it is that you’ll be able to live comfortably well into the future with the assets that you’ve accumulated. But if either you or your spouse should need long-term care, And they sort of define that as needing care longer than 90 days. That can put a very big dent in the nest egg. And if that’s not planned for, then the planning has not been done well. There are some other really important components in planning for longevity, which I will talk about right after the break.
SPEAKER 01 :
Retirement planning with Golden Eagle Financial isn’t about products or spreadsheets. It’s about you. Al Smith spends more time listening than talking when he meets with clients. He understands that before he can build a strategy, he must understand the person for whom it’s designed, fears, dreams, wants, needs, and comfort with risk. That’s why clients trust Al Smith with comprehensive retirement planning, from pensions and Social Security to owning property or donating time and money. Al wants to know the things you really want to do with your money in retirement. Once he understands you, he will use tools to help you understand different scenarios to fine-tune your plan. Al Smith says it’s easy. Once he knows someone, the planning is simple. Call Al Smith of Golden Eagle Financial if you’re ready to make your dream a reality. No pressure, no upfront cost. Just a conversation and a unique plan crafted for you. Find Golden Eagle Financial on the KLZ Advertiser’s page to start the relationship your nest egg deserves. Investment advisory services offered through Brookstone Capital Investment LLC, a registered investment advisor. BCM and Golden Eagle Financial Limited are independent of each other. Insurance products and services are not offered through BCM, but are offered and sold through individually licensed and appointed agents.
SPEAKER 02 :
Welcome back to the second half of Retirement Unpacked. We’re talking about planning for longevity because we know that we are living longer. Medical science is keeping us on this planet for longer. But sometimes the quality of life as we get way up in years is not as good as we would like. And we were talking briefly about long-term care. That needs to be a component of planning for longevity because if someone needs long-term care, If it’s only for 90 days, that’s not too devastating to the regular financial plan that you’ve made, but sometimes care needs to be for years, and when that’s the case, The budget basically doubles because it’s a ballpark $10,000 a month for care in a nursing home or a memory care facility. And we don’t know if someone’s going to be there for a few months or a few years. But it’s something that needs to be incorporated into the plan. Again, referring to Forbes, the things they said were most important is having a source of at least one source, if not more, of lifetime income. And this show today is not about Social Security, but as far as planning for longevity, Social Security is an important component. For example, if you retire at full retirement age, which for most people is close to age 67, then you will receive the cost of living increases that are experienced every year. On the other hand, if you are able to live comfortably without drawing Social Security until age 70, that benefit will increase by 8% each year. The other thing is if I am talking with a couple, we know statistically that women live longer than men, and women can collect the full social security of their spouse when he passes away. And not in every case, but it’s often the case that the male breadwinner has more Social Security benefits because many women step out of the labor force for certain periods to raise children and so forth. So by the man of the house or the bigger breadwinner of the house, by… he or she deferring to age 70, not only will that Social Security benefit be significantly higher, but when that primary or greater breadwinner passes, the spouse will be able to collect that full Social Security benefit. So that is a mechanism to help plan for longevity because there is a cost of living feature that’s added to that. And that cost of living feature is a percentage. And I would prefer having a percentage increase on the benefit at age 70 than I would the benefit at age 67. Because we’re talking about the difference between maybe $3,000 a month and $3,500, $3,600 a month. It can be quite significant. What else is highly recommended is if you have availability of a pension. I know when I sit down and talk to people about their pensions, there is usually about an eight or maybe even a 10-page document from someone’s employer explaining about all the various options with respect to a pension. i haven’t seen i don’t think i’ve seen any that include a cost of living feature i think para which is the colorado pension and the pension for teachers i think it used to contain a cost of living feature and i don’t believe it does any longer but by taking advantage of a pension That’s going to pay a lifetime income. And when I’m sitting talking with a couple, we take a look at what those alternatives are for survivor benefits. They’ll often have a reduced pension where the same full amount will be paid to a spouse. there is often also a benefit where there’ll be a reduced benefit and the spouse will collect two-thirds of what the worker is collecting or possibly 50%. The reduction in the pension is largely determined by the age of the spouse and also how much benefit is going to the spouse, the full benefit, half, and so forth. Now, one of the things that we sometimes talk about as an alternative is collecting the full benefit benefit for the pension and instead of having the pension reduced for a survivor benefit using that for life insurance and whether that is better or not varies by every situation but one of the advantages is we know for certain that the life insurance will benefit someone in the family On the other hand, the pension, if both a husband and a wife live for 20 years and they die within a very short time of one another, then that reduction in the pension will not benefit them. It will benefit someone else who worked for the same company who also has a pension. So a lot of things to think about when it comes to planning pensions. for longevity in retirement, especially with respect to the pension. Also, annuities provide lifetime income. And I don’t mean annuitization. The word annuitization is basically where a lump sum of money is given to, not given to, but it’s deposited with an insurance company in exchange for lifetime income. And just like the pensions, there may be alternatives where it’ll be guaranteed for 10 years or possibly a smaller amount will be guaranteed for a spouse. So annuitization, the lump sum of money used for that is gone. On the other hand, many annuities have what’s called an income benefit. Sometimes that’s available after having the annuity contract only for one year. Some of them have a 10-year deferral with a significant benefit. Sometimes the income will increase. Sometimes it’s flat. I know a lot of people are not fond of annuities, but it’s the only financial product that can guarantee an income for as long as you live. And I don’t recommend that a very high percentage of someone’s assets be in an annuity, but it serves a very useful purpose in filling that gap, making certain that someone’s income will last as long as they do. The other obvious one is drawing income from investment accounts. There used to be what they called the rule of thumb, that you could draw 4% from your investment account, and that should allow your investment portfolio to last for like 30 years. However, with some of the volatility that we’ve experienced in the market, that has been adjusted. Excuse me. There’s even one that’s called a 3% rule, which is very conservative, and that basically says someone can start by drawing 3% of their investment portfolio as an income and then adjust that each year depending on inflation and their future income needs. The 4% rule of thumb, according to Morningstar, and if any of you out there are investors, I’m sure you’re very familiar with Morningstar. They are recommending that rather than using the 4% withdrawal rate, that a 3.7% withdrawal rate be used. Now, for people who are younger, and by younger I mean like in their 40s or 50s or something like that, what I highly recommend is that you take a look at what your future income needs might be. And there are software programs that are available to me and to other advisors that you can sit down and use. estimate what your future nest egg will look like based on when you think you want to retire and it will also show if the current level of savings that you’re doing will be adequate for you to retire when you want to retire and some of those or most of those software programs will come up with a percentage likelihood of success And I have worked with people where the percentage likelihood of success was as low as 7%. And I’ve also met with people whose likelihood of success was 100% because there were very strong savers. And no matter… what happened in the market based on previous history, and no matter how long they lived, their resources would be adequate to deal with the elephant in the room in retirement planning, and I call the elephant in the room longevity, because I think that’s even more significant than taxes or market volatility or anything, because that’s essentially, it used to be I started the program talking about Social Security. People retired at 65 and died three, five, eight years later. That’s not the case anymore. So planning for longevity is a really important thing. component of retirement planning. If you have some concerns yourself, am I saving enough money toward retirement? Will I be paying a lot of taxes in retirement? If these are things that are a concern to you, call my office at 303-744-1128. We’ll arrange a conversation and There’ll be no charge for that. And we can determine if you’re on track to have enough money, no matter how long you live, and to minimize the taxes you’ll be paying in retirement also, which I believe is really important. Thank you for tuning in. It’s the end of our program already. God bless you. And let’s continue to pray for our country and the folks in the Middle East who’ve suffered recently that there’ll be some peace there and also in Ukraine. And hopefully you’ll be here next week. Again, God bless you. Have a great day.
SPEAKER 03 :
Thank you for listening to Retirement Unpacked with your host, Al Smith of Golden Eagle Financial.
