Longevity Should Have a Prominent Place in Any Retirement Plan

NEWARK, N.J.--(BUSINESS WIRE)-- In 1935, when Social Security was enacted, life expectancy at birth was 62 years. Fast-forward 70 years and the average life expectancy in 2005 reached 78. That’s 16 more years—most of which will likely be spent in retirement—so longevity must play a key role in a retirement plan.

In fact, planning for longevity might just be the plan. “The goal is to make retirement assets last as long as possible, with the understanding that no one knows how long they’ll live,” said Robert Fishbein, a vice president and corporate counsel in Prudential Financial’s Tax Department.

Today’s challenging economic environment has forced many Americans to review their retirement planning goals with a more critical eye. To help navigate through these turbulent times, Fishbein offers the third installment of his biweekly series of tips on planning for retirement.

Fishbein uses these eye-opening statistics to show why investors should give prominent consideration to longevity:

• Today, once an individual has reached age 65, he can expect to live, on average, 19 years or more. And 65-year-old individuals who are married have almost a 50 percent chance they or their spouse will live to age 92.
• Today’s retirees are healthier for more of their retirement, which means they will have ample opportunity to spend down their retirement assets.
• Actually, it’s not extremely unlikely that today’s near retirees could hit the triple digits. In light of this, a helpful strategy in retirement planning is to model the probability of assets lasting to age 100 or beyond.

“Every retirement plan should be revisited annually in light of an individual’s current age and actual investment return,” said Fishbein. “This real-time planning should inform the choices you make with respect to managing investment and longevity risk through a combination of Social Security, traditional pension plan payments and distributions from 401(k) plans, annuities and personal savings.”

Fishbein’s next tip, which focuses on Social Security strategies, runs the week of May 18.

Prudential Financial, Inc. (NYSE: PRU), a financial services leader with approximately $542 billion of assets under management as of March 31, 2009, has operations in the United States, Asia, Europe and Latin America. Leveraging its heritage of life insurance and asset management expertise, Prudential is focused on helping approximately 50 million individual and institutional customers grow and protect their wealth. The company’s well-known Rock symbol is an icon of strength, stability, expertise and innovation that has stood the test of time. Prudential’s businesses offer a variety of products and services, including life insurance, annuities, retirement-related services, mutual funds, investment management, and real estate services. For more information, please visit http://www.news.prudential.com/.

The Prudential Insurance Company of America, Newark, NJ.

0151550-00001-00

Prudential Financial, Inc.

Debbie Meany, 973-802-7703

or

Lisa Bennett, 973-802-2894

Source: Prudential Financial, Inc.