How Can I Afford to Live to 100?

When Joe Roseman, a retirement-planning expert in Charlotte, N.C., meets with a new client, there’s one bit of information he wants to know first. It’s not how much they have saved, and it’s not when they want to retire. It’s how long their parents and grandparents lived.

That’s not because it’s necessarily the best predictor of longevity (though it’s a decent place to start). Rather, it gives Roseman a baseline of his client’s expectations. He’ll then remind his clients that thanks to advances in medicine, they’re likely to live even longer, which means their investments need to last longer too. “I tell people that you need to plan to live longer than you think you’re going to live,” he says.

Life expectancy in the U.S. has been steadily increasing over the past two decades (although 2015 saw a slight but troubling drop). And while that’s good news overall, it also means that many of the assumptions Americans made about their own retirements are out of date.

Here are some pieces of advice from retirement planners and others about how to make ends meet in the new age of much older age.

PLAN TO HAVE MORE THAN ONE RETIREMENT

The idea of working your entire career at one company and then retiring at age 65 is not realistic–and it’s not sustainable for most workers. Instead, plan to downshift into part-time or less demanding work, postponing the years when you’ll have to live entirely off your savings. That might mean getting a late-in-life teaching gig, consulting for a company in your industry or working for a local nonprofit. Carl Seidman, a strategic business adviser, recommends taking “miniretirements” to switch careers, travel or build new job skills. “I intend to retire throughout my life several times,” he says.

START A HEALTH SAVINGS ACCOUNT

A health savings account (HSA) is sort of like a 401(k) for your medical expenses. You put in pretax money–up to $3,400 in 2017 for one person–let it grow and take chunks out when you have big health-care-related expenses down the road. Jeff Vollmer, managing partner at Hyde Park Wealth Management in Cincinnati, says few of his clients even know it’s an option–which he blames on some of his fellow retirement planners. “Most financial advisers stand to make nothing on an HSA,” he says, “so it’s generally not something that goes into their financial-plan recommendations.”

CONSIDER INVESTING IN AN ANNUITY

One problem with 401(k)s, which are one of the most common retirement-saving strategies, is that you have a set amount of money but you don’t know how many years you’ll need to live off it. One way to protect yourself from outliving your savings is to also purchase an annuity–essentially a pension plan that you pay for yourself. Matt Sadowsky, director of retirement at TD Ameritrade in Jersey City, N.J., says putting even a small amount into an annuity is a way to balance out your retirement savings. “You want to hedge against the outlier event that you live a very long time,” he says.

MOVE TO A PLACE WHERE IT’S CHEAPER TO LIVE

It’s a truism of accounting: if you can’t increase your income, you need to cut your expenses. One way to do that is to move somewhere with a lower cost of living and lower tax rates. Financial advisers say to keep in mind state income-tax rates, local property taxes and sales taxes when contemplating a big move. Roseman recommends considering a move to the South, where those things tend to be cheaper. And some research suggests cities are better for older Americans than rural or suburban areas, because they have denser, more affordable housing and free social services geared toward seniors.

USE TECH TO STAY INDEPENDENT LONGER

Your nest egg shrinks much more quickly once you need around-the-clock care. But new technological solutions could make it possible to live independently longer. For instance, IBM has partnered with Avamere senior living facilities to test home systems with sensors that alert caregivers when seniors are not following their daily routines–an early sign of possible trouble that could permit them to intervene before a serious problem develops. “This would allow someone to stay where they live as long as possible,” says Susann Keohane, aging-research leader for IBM.