For the holiday, I traveled to be with my elderly parents. They are at an age when medical issues start to catch up and make life challenging. Helping them for the last few years has taught me some lessons that we all should heed, whether we are still working or in retirement.

My parents are both in their early 90s. They retired at ages 59 and 62, meaning they have been retired for 30 years! When they retired, they had a financial plan completed that worked with a life expectancy of 75 years.

Obviously, they beat that by a wide margin. But just 30 years ago, 75 was considered about the max lifespan. Now, when we hear of someone passing before they are 90, it feels like they went early.

That’s why, for those of us in our 50s and 60s, we shouldn’t be looking at current life expectancy when we plan. It seems logical that we should be planning to live to well over 100.

Here’s what that means…

Retiring at 65, that would mean looking forward to possibly a 40-year retirement. Our society will eventually start pushing expected retirement out further, which makes sense.

Let’s look at some financial considerations. According to the Bureau of the Census, in 1992, the median household income was $31,553. In 2021, the median household income came in at $70,784.

If the same happens over the next 30 years, if you retire now with a $100,000 retirement income, in 30 years, you will need to bring in around $220,000 to maintain your standard of living.

The good news is that 30 years is a long time to let compound growth work in your favor. If we dig up a compound interest calculator, to go from $100,000 to $220,000 in 30 years requires about a 3% annual growth rate of your income. That’s a doable number.

Social security and most traditional pensions will adjust for inflation. My Dividend Hunter services show subscribers how to earn 8% cash yields on their investments. If they draw 5% of that income once in retirement, it leaves 3% to reinvest. The reinvested 3% will grow the portfolio income by a similar percentage, providing sure income growth for as long as your retirement lasts. I am personally counting on at least 40 years.

My point, which I have learned primarily from helping and watching my parents, is that I need to stay focused on the LOOOOONG term with my investment portfolio. I use dividend/income-focused strategies to ensure my investment income grows every quarter.

This Thanksgiving, I will give thanks that my folks are still with us. I am also thankful that they gave me a vision of the future and what I need to do to make it enjoyable and comfortable.