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Although none of us can know how long we’ll live, life expectancy has increased steadily for centuries. Today, women in Japan and Singapore can expect to live to be close to 90. The United Nations estimates that by 2050, the number of people 100 or older will have grown by fourfold. This upward trend may be good news, but it’s also a recipe for financial anxiety because many of our ideas about work, life, and retirement are stuck in the twentieth century. How many of those who anticipate living to be 100 or older are investing for longevity?


These aren’t your father’s life stages.


In the last century, most people’s lives unfolded in three distinct stages: education, career, and retirement. They went to school, worked their whole lives for a single company—or at least a single industry—and received a company-sponsored pension when they retired. They stopped working at 65 and might expect to live another ten years or so after that.

Consider how different things are for millennials and the younger generation of workers getting their first jobs. Not only is job-changing expected, career-changing is accepted. Life shifts are the norm. People continually reinvent themselves to respond to new technologies and new opportunities. Furthermore, people now entering the workforce can expect to live another 20, 30, or even 40 years beyond the retirement age of 65.

Obviously, the retirement planning and investment strategies that worked for their parents are not going to support this generation of workers.

investing for longevity

You might think you can beat the odds by starting young and saving a lot.


It’s true that one of the best things you can do to ease your retirement is to start saving early so you can take advantage of the power of compound interest.

But starting early is not enough.

If you begin saving $250/month at age 25 and earn 8% interest, compounded monthly, for 40 years, you’ll have almost $1 million—$878K, to be more exact—by the time you’re 65. (Note that averaging 8 percent annually over 40 years is a generous rate of return that assumes you are also investing wisely.)

A million bucks may sound like a lot of money. But let’s assume that after retirement your $1 million in investments generates a more conservative 3% interest annually. This rate of return will allow you to withdraw around $60K annually for 20 years before it’s gone. Again, this may sound like a lot if you’re just starting out. But what if you need more income each year? What if you live longer?


It’s a whole new outlook.


You could continue to work past the traditional retirement age. Working harder and longer, however, is not a recipe for a fulfilling life. In their groundbreaking book, The 100-Year Life, Lynda Gratton and Andrew Scott point out that “A life well lived requires careful planning in order to balance the financial and the non-financial, the economic and the psychological, the rational and the emotional. Getting your finances right is important, but money is far from your most important resource.”

The book introduces the concept of a multi-stage life. Instead of the three traditional stages of education, career, and retirement, our lives will shift to encompass additional stages and cyclical returns to earlier stages. In fact, a multi-stage life may be the best way to achieve a fulfilling long life!


Financial planning for a long life is complicated.


If you’re going to live a 100-year life, you have to know yourself, be willing to tackle difficult questions, and understand your future needs and goals. You need to be flexible to weather life shifts and adapt to new opportunities. More opportunity also means more uncertainty. You won’t stick with the same company for your whole career—or even with the same career for your whole working life. You’ll probably be self-employed at some point.

All this means that planning for retirement isn’t straightforward. While achieving the best return on your savings is an important aspect of financial planning, relying on rates of return of significantly more than 3% above inflation may not be wise. And just starting early and putting your retirement savings on automatic pilot won’t get you where you need to be.

So what can you do to make sure you’re not simply okay but thriving after your work life ends?

Two factors are critical to making sure that a long life is also a financially secure life: knowledge and control.

financial literacy

Financial literacy is too important not to invest in.


A growing body of research shows that financially knowledgeable investors earn more, even when controlling for risk.

Evidence also suggests that experience is the best way to improve financial literacy. This is another reason why it’s important to begin saving and investing early—even though it’s not the only action you should take. You’ll have longer to learn and making early mistakes with small amounts of money won’t be devastating since your finances will time to recover.

Financial planning terminology can be baffling, with concepts such as geometric progressions and compound interest. Unfortunately, most people don’t learn much about personal finance management in school, although it’s a critical life skill. Too many people, especially women (who can expect to outlive men and are more likely to live multi-stage lives) shy away from financial planning and investing because they don’t understand it.

There’s no better time than now to start learning. We recommend that you do any or all of the following to improve your financial literacy:

  1. Read financial news online
  2. Take an online course about personal finance
  3. Find a financial coach
  4. Join finance education workshops
  5. Enroll in private mentoring sessions
  6. Find like-minded peers who are also learning

Embrace the challenges of understanding financial planning and engage with others who are at your same life stage so you can begin investing for longevity and educate yourself for a long and fulfilling life.


About Heels & Yield


Heels & Yield empowers women to manage their finances and to nourish their health and their wealth through its proprietary holistic wealth management practices. To help clients achieve holistic wealth with guidance and accountability, Heels & Yield offers services including group workshops and private wealth mentoring that combines financial education with personal financial coaching.



This blog and its contents were created by Heels & Yield Limited. Our blog and its contents are for general guidance and informational purposes only and should not be treated as legal, accounting, financial, investment or tax advice. For specific questions related to your financial, legal or tax situation, please consult your own attorney, accountant, and/or independent financial advisor for expert advice and carefully consider all relevant risk factors. Heels & Yield Limited is a financial education company and not a financial advisory firm or a law firm or a certified public accounting firm. Please visit our website for full terms of our disclaimer and terms conditions of use. Please read our full disclaimer here.

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