Happy 100th birthday! With more Americans enjoying longer and healthier lives than ever, it’s a far more likely concept than it sounds. In fact, over 76,974 people have reached this milestone today (a figure that’s more than doubled since 1980), according to the U.S. Census Bureau. Just one catch: Planning for 30-40 years of retirement is way different than arranging for 15-20. Luckily, a variety of annuities and other healthy income-generating investment vehicles can help you hit the jackpot when it comes to financial security – and enjoy predictable payouts for as long as you live.

Advances in Healthcare are Bringing Longer Lifespans


Gone are the days when Ben Franklin was the only octogenarian on the block. American girls born now can expect to live past 81 on average, while the average newborn boy will surpass 76, the CDC reports. Meanwhile, 65-year-old women are likely to live another 20 years, while men at 65 are likely to hit 83. And the American Medical Association says the numbers are even higher for those with good educations and higher than average incomes.


But longer life brings extra risk, and traditional retirement planning may not meet the challenge. For one, you might not be able to accumulate enough money to support a retirement that lasts 30 or even 40 years.


Health care can be particularly unpredictable. A 65-year old couple retiring today can expect to pay $285,000 for medical care not covered by Medicare. Broken down, annual costs total around $4300 for healthcare expenses per retiree, according the Center for Retirement Research at Boston College.


What’s more, these costs are rising at twice the rate of inflation, and assume relatively good health on the part of retirees. If you or a member of your family has a recurring health condition, needs supplemental insurance, or requires regular medical treatment, these costs can balloon. Unexpected emergencies can only inflate them further.


Planning for Uncertainty Requires Us to Diversify


Today’s trends make a good case for turbocharging your savings, and making smart financial plans as a hedge against an uncertain future. An early start gives your retirement savings time to grow and compound. A workplace plan is a convenient option, and lets you take advantage of a match if your employer offers one.


Also pay attention to your asset allocation — the mix of stocks, bonds and other investments you hold. The traditional rule is to subtract your age from 100 to arrive at the right proportion of equities, or stocks, for your portfolio. In that scenario, a 35-year-old may want to consider allocating 65% of their money to equities and 35% to bonds. Trouble is, these days that might risk having a portfolio that won’t grow enough to last your whole life.


So you might want to consider new math: Subtract your age from 110 or even 120 to determine how much stock allocation could be appropriate for you. Sprinkling in alternative investments such as commodities and real estate may also help your portfolio outpace inflation, which eats away at your spending power.


Investing involves risk and it is possible to lose money. Some investments are riskier than others so when developing an investment strategy, you need to consider a variety of factors such as your goals, time horizon and risk tolerance.


For more on the future of retirement, please see part two of this series.