96.3 FM Radio Wealth Management Spot
Looks like we are living longer here is the land of milk and honey. BC Vital Statistics Agency released a report 2009: British Columbians now living on average to 81.4 years up from an average life expectancy to 78 in 1991. Living longer - presumably need more money for retirement - wealth accumulation.
Not only that these numbers don't give us or clients any sense of risk... For example the remaining life for someone who is 65 year old is on average 20 years. The Standard deviation around that is 11 years meaning most will live between 75 and 95 and the variability is 56% meaning you have a 50/50 chance of making 85 if you are 65 today. That begs the question How much money does a 65 year old need? It's important to have a tracking system for your money so you can adjust your stratgey as life events present themselves. A rough guide we use is draw about 4% of your capital in income and you will be able to preserve your capital and protect against inflation. You may on the other hand have a goal of not being the richest person in the graveyard so drawing more out may be an option.
Not only that these numbers don't give us or clients any sense of risk... For example the remaining life for someone who is 65 year old is on average 20 years. The Standard deviation around that is 11 years meaning most will live between 75 and 95 and the variability is 56% meaning you have a 50/50 chance of making 85 if you are 65 today. That begs the question How much money does a 65 year old need? It's important to have a tracking system for your money so you can adjust your stratgey as life events present themselves. A rough guide we use is draw about 4% of your capital in income and you will be able to preserve your capital and protect against inflation. You may on the other hand have a goal of not being the richest person in the graveyard so drawing more out may be an option.
posted by David Allard at
8:27 AM
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