You Could Live to Be 100 Years Old. The Challenge for FedEx Employees Is to Avoid Running Out of Money.

As FedEx employees age and expectations of retirement change, Patrick Ray of the Retirement Group, a division of Wealth Enhancement Group, says proactively planning for a decades-long retirement is critical.

The article advises FedEx employees to balance sustainable spending with diversified savings strategies, says Michael Corgiat, a representative of the Retirement Group, a division of Wealth Enhancement Group, about planning for an active, extended retirement.

In this article we will discuss:

1. Health and Longevity: The focus on monitoring key health metrics for a longer, active retirement and how people such as Jordi Visser are using technology and lifestyle changes to increase life expectancy and quality of life.

2. Investing Strategies for Extended Retirement: Strategies for FedEx employees to manage their investment portfolios with an underlying biological age view.

3. Planning for Future Expenses and Lifestyle: How retirees can manage expenses such as healthcare and make sound decisions about where to live to support a comfortable and fulfilling later years.

Jordi Visser tracks his heart rate daily. He also monitors his breathing and sleep quality and eats lots of fruit and vegetables. And Visser, 56, does not do that because of poor health. Instead, he is looking forward.

His goal:

decades of active retirement. In 2011, 54% of retirees thought they would die younger than the average person their age and gender. Of these, only 31% reported a longer life expectancy than the population average.

A PlanAdviser article says 'The Society of Actuaries estimated that about 43% of retirees underestimate their life expectancy by at least five years,' says Kate Beattie, senior retirement income strategist with Capital Group in Los Angeles. And everyone except investors knows that Americans are living longer than ever before.

We are at the intersection of technology and longevity, 'Visser writes for a Barron's article. FedEx employees might recall that the chief investment officer of Weiss Multi-Strategy Advisers also thinks that in the next decade, new medicines and technologies will enable Americans to live longer and healthier lives, according to the Barron's article. Tom Brady is a prime example of what was impossible, Visser said.

Brady, who just announced his retirement from football at age 45, is obviously in a class by himself. But Visser has made a point: The rest of us mortals might want to reconsider our assumptions about what is achievable in our senior years and in our investment strategy. FedEx workers retiring should understand that a decades-long retirement requires a long-term portfolio. Also, controlling your expenses while enjoying retirement may require finding a delicate balance.

Maintaining Stocks

Those soon to be FedEx retirees may find comfort in an old rule of thumb for retirement investing: Add your age to 100 to find out how much of your portfolio should be in stocks. Those who are 70 should put 30% of their portfolio in stocks.

If any healthy adult can live to 100, this rule seems hopelessly outdated. This 70-year-old must plan for the next 30 years - and that means remaining invested in equities to generate the growth needed to fight inflation.

But equities are the long-term engine your portfolio needs, says Pete Bush, advisor with Cetera Financial Group and co-founder of Horizon Financial Group in Baton Rouge in a Barron's article.

And people normally think, oh, I just hit retirement. I should be safe. They are considering retirement, not retirement itself, 'he says.'

FedEx employees should ask why some 70-year-olds are as healthy as 50-year-olds. In light of that, Visser suggests investors look at your biological age, which is basically your health score that varies widely from your chronological age. Scientists are developing accurate ways to determine biological age. Some of the techniques sound fantastical - like analyzing saliva and blood. But Visser says there's one big takeaway for investors: Stay focused on the fundamentals. 'Your health should inform how you look at your portfolio,' she said.

The solution for FedEx employees is finding the optimal asset allocation. Bush advises investors weigh growth versus value, noting that growth stocks have done well in the last decade but poorly in the last year. Eventually, international stocks may also outperform U.S. stocks - a contrast to the sector's performance over the past decade. This is partly because European and Asian stocks are generally cheaper than American stocks. Asset manager Vanguard expects higher 10-year annualized returns for developed markets outside the United States - 7.2% to 9.2% - than for U.S. markets - 4.7% to 6.2%.

A Barron's article by Captrust financial advisor Jeremy Altfeder says bonds can provide some income and security now that interest rates are higher. Take a client that spends USD 100,000 per year. We need a year's worth of necessities, therefore. We could hold USD 100,000 in Treasury bills.

Altfeder says it helps investors relax knowing they have enough money set aside - up to seven years' worth depending on the client. He says laddering out Treasuries and other instruments is predictable. If you hold the bonds to maturity, you know their yield.

Numerous financial advisors also suggest complicated strategies involving alternative investments, trusts and estate planning - depending on the individual's wealth, tax situation, desire to pass an inheritance to heirs or charity - and risk tolerance. So the aim is to keep this wealth, sometimes to the next generation.

A New Take on Work-Life Balance.

FedEx employees should ask how a longer, healthier life creates incentives to work longer and postpone Social Security filings. This will ensure a larger monthly benefit when you claim later. Such actions may help you save more and give your portfolio time to grow before you start taking out money.

Two other ways for investors to save more to advance their retirement savings exist. For one thing, updated contribution limits set by the Internal Revenue Service allow investors to contribute up to USD 22,500 to their 401 (k), 403 (b), and other retirement plans by 2023 over the USD 20,500 limit previously set by the agency. Over 50 can save up to USD 7,500 more. New legislation will gradually raise the age of required minimum distributions - RMDs - from 72 to 75 - for investors planning a long retirement.

FedEx employees should also remember they are not expected to stay or even work full time. Clients have reorganized their work so they are not racing to retire, said Chip Munn, advisor and chief executive officer of Signature Wealth Strategies in Florence, South Carolina. A Barron's article says he believes older workers offer 'value and leverage.' But your company might not have any formal plans for accommodating your desired schedule - you might just have to ask your employer, 'Hey, I don't want to retire but I'd like to work part time.'

Active lifestyle has its benefits too. Those who are most happy and healthiest work longer but less, he says.

Even for those who think they have enough saved up, early retirement is more risky than you might think. FedEx employees should read about how Bank of America employee Cyndi Hutchins saw this firsthand. Her grandmother retired after 41 years of work at age 55.

At that point I started thinking differently about retirement, 'says Hutchins, director of financial gerontology with a bank's retirement research and insights group. We expected 10 to 15 years of retirement. We missed several factors. And she had a pension - a tiny pension - that did not last 41 years. Then her family was ultimately responsible for paying for her grandmother's living expenses.'

Between 1960 and 2015, the US life expectancy increased by nearly 10 years - from 69.7 to 79.4 years. The 2020 Census Bureau projects an additional 6.1 years of increase in average life expectancy between 2016 and 2060 - a record 85.6 years - according to the report. FedEx employees should also note Americans are living longer than ever before. Almost a fifth of all Americans are over 65 years old.

A combination of soaring inflation and last year's weak stock and bond markets means no wonder more people fear running out of money in old age. This includes people with big savings. A 2022 survey of high-net-worth investors by Natixis Investment Managers found more than a third of millionaires believe retirement 'will take a miracle.'

FedEx employees should understand how this anxiety is fueling increased demand for annuities - insurance contracts that promise a lifetime income. Frank Pare of PF Wealth Management has considered adding a single premium immediate annuity, or SPIA, to some clients' retirement plans. An SPIA involves an investor paying a lump sum to an insurance company that provides a lifetime income stream to the annuity owner. The payout on the annuity depends partly on the owner's age and gender.

There are exceptions, Pare says. Firstly, fees might be steep. In addition to stocks and bonds, you must keep some of your retirement money in these and other assets. You do not want to leave yourself short outside the SPIA, 'Pare says.'

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A third concern with annuities is inflation. And without an inflation rider, your purchasing power will be eroded if inflation picks up like it did last year, Pare says.

FedEx employees considering an annuity should know it's just one tool among many. Pare says he does not believe in silver bullets.

Expense Management

Along with maximizing income, retirees of all wealth levels need to budget and avoid major new expenses that require maintenance in retirement - like a vacation home or new boat.

FedEx employees should note how healthcare is the expense that retirees underestimate most - for healthy seniors who live long. A 2022 report by Fidelity Investments estimates a 65-year-old couple will spend on average USD 315,000 on medical expenses in retirement. This was up 5% from 2021 and almost doubled since 2002, when it was USD 160,000. In the first two decades of retirement a healthy lifestyle can help keep costs down but there are some things beyond our control. Consider opening a health savings account with tax benefits to save for future medical costs. If you can contribute to an HSA without using the money to pay for current healthcare costs, you can save for long-term care, 'Hutchins of Bank of America says.'

For FedEx employees, where you live in retirement will affect your expenses - make the decision now. Some Americans move to warmer climates and cheaper living states. Consider whether your new community can handle your future medical needs and hobbies.

In retirement, most Americans never move or rarely move far. A survey by the 2021 AARP found that nearly three in four adults over age 50 intend to stay put in their current home for at least the next few years. If you stay healthy and active, you can stay in your current home, 'Hutchins tells Barron's. Ask yourself if your home is age-friendly, as you age. She says if you have no bathroom on the first floor you should budget for that renovation.

The Key to Contentment

Most importantly, advisors and healthcare professionals agree that having an active social life in retirement is key to happiness. Obligate a hobby if you do not already have one. Spend time with a charity. Serve food to friends.

It sounds trite to FedEx employees. But it is very healthy. A longitudinal Study of more than eighty-five years of Adult Development following the same adults and their descendants has found that personal contact is important to longevity and physical and mental health.

Isolation and loneliness accelerate cognitive decline symptoms fastest, Bank of America's Hutchins says. Still interact with people and make sure your physical and emotional needs are met, 'he said.'

In retirement, Joseph Coughlin, director of the MIT AgeLab, says plan for your lunch companions. This influences the quality of your investment portfolio as well as your social portfolio. Have you friends? If you retire & move, can you find them? The friendship takes time, he says.

If you are going to live to be 100, you want close personal relationships and enough money to live comfortably.

Sources:

1. Horizon Financial Group . 'People tend to think, ‘Oh, I’m getting near retirement. I’d better play it safe.’' Horizon Financial Group, no publication date given. Accessed 27 Feb. 2025.  Horizon Financial Group .

2. Vuink.com . 'You Could Live to 100. The Trick Is Not Running Out of Money.' Vuink.com, 17 Feb. 2023. Accessed 27 Feb. 2025.  vuink.com .

3. Segal, Julie . 'How a Hedge Fund Is Moving Beyond Its Charismatic Founder.' Institutional Investor, 25 Jan. 2022. Accessed 27 Feb. 2025.  Institutional Investor .

4. Morningstar . 'General Research Publications.' Morningstar, Inc., no specific publication date. Accessed 27 Feb. 2025.  Morningstar .

5. Harvard Study of Adult Development . 'Research Publications.' Harvard University, ongoing since 1938. Accessed 27 Feb. 2025.  Harvard Study .