The Longevity Issue

By John Brummitt

As Americans continue to live longer and longer, they face new challenges in retirement, according to a new report released from the Center for Retirement Research at Boston College. The main challenge comes in the form of high out-of-pocket medical expenses, combined with the increased possibility of making financial mistakes due to declining cognitive abilities and the specter of widowhood.

Currently, the 75-plus demographic is projected to grow from 23 million in 2020 to 45 million by 2040. Of this group, 11% will have difficulty performing a basic daily task such as bathing or feeding themselves, and 19% will have difficulty performing harder tasks like cooking or shopping. Also, women in their early 60s today have a 20% chance of being a widow by the time they reach age 75, and that number jumps to 33% before they turn 85.

Close to a third of American households approaching retirement have no retirement savings. The average “prepared” households only have $135,000 when they enter retirement. This amount, if annuitized, provides roughly $600 per month. Social Security payments also have been decreasing since full retirement ages continue to increase, leading more individuals to take the penalties and claim benefits early.

All of this adds up to fewer funds needing to last through a longer lifespan. The average American household in their early 70s will end up spending more than $100,000 in out-of-pocket medical expenses. Also, one in six seniors in their early 70s reports losing money in a fraudulent investment scheme, because financial skills tend to deteriorate as we age.

Today, many seniors rely on children to support them, but many of those children are not financially in a place where they can assist. This creates a downward spiral by not allowing those children to prepare financially for their own future producing the same situation over and over.

How do we stop this endless cycle?

Board of Retirement is calling on Free Will Baptists to help end this cycle. We are seeking funding to build an endowment to provide assistance to Free Will Baptist employees caught by the longevity issue. We believe assisting these families will not only relieve the individuals receiving assistance but also children and families who shoulder the full burden of providing for parents who have outlived their resources. In return, this allows children to be better prepared for their retirement, thus ending the cycle.

As we begin this effort, we are looking for individuals, small groups, churches, associations, and businesses to come alongside us to help fund the endowment. Every gift large or small will have lasting effects for generations to come. If you are able and willing to support this ministry, please contact our office or visit our website to find out more.

Help us stop the cycle and allow your children and grandchildren the opportunity to fully prepare for future ministry.

About the Writer: John Brummitt became director of the Board of Retirement in January 2016. He graduated in 2011 with an MBA from Tennessee Tech University. A 2004 graduate of Welch College, he has been with the Board of Retirement since spring 2006. Learn more about retirement options:
www.BoardofRetirement.com.