Elizabeth never really thought about hitting 90 years of age but she reached the milestone in August complete with a surprise birthday celebration and a basket of UK sweets and goodies from her family.

A former school teacher who came to Canada when she was 39, Elizabeth ascribes her longevity, ironically, to the hardships she endured when she was a teenager during the Second World War.

A lack of food and a scarcity of sugar meant her family was fed from the vegetables they could harvest from their victory garden. With gas also unavailable she had to cycle to school. She believes the healthy food and exercise may have been a contributing factor in her reaching her landmark birthday.

Elizabeth is one of the increasing number of Canadians who are hitting their 90s and statistics show that those nearing the century mark will be a larger and more influential part of society in the future.1

Consider that life expectancy in Canada in 1921 for women — the decade that Elizabeth was born — was just 56 years.2 Now, for a woman who will be 30 in 2025, the median life expectancy is projected to be 90, while for men, it’s 87.8.3 And there will be many more nonagenarian (what you call a person in their 90s) birthday parties to come as the 90 to 99 population grew by 34% from 2011 to 2016.4

So, many of us may wonder, is this my future? Can you look in the mirror and see yourself as 90? Greyer, for sure, a bit slower, and certainly more weathered for the years you’ve put in, but still you, and still up for life’s new challenges.

And if you can envision yourself at 90, you probably want to address basic questions about your lifestyle, your health and finances now, when you’re employed, and not when you’re 85. You know the old refrain, not to outlive your money? If you burn through your retirement savings early in retirement you may have to drastically adjust your living standards later in life. That becomes even more important when you realize you might have another decade or more to your life than you counted on. If that’s so, here are some ideas and considerations for those who want to start planning for 90, whether you’ve got grey in your hair now or not.

Plan to be healthy

What’s the fun in living to a ripe old age if you aren’t healthy enough to enjoy it? While people hitting 90 now tend to be healthier than previous generations and are the beneficiaries of medical improvements during their lives, we can all benefit from choosing a healthier lifestyle and giving ourselves the best chance of living as long as possible.5 Dr. Adam Stewart, a family physician, from Madoc, Ontario, and MoneyTalk columnist says that while people can and should take care of themselves when it comes to living longer, some factors may be out of our control. These are the genetic and socio-economic factors that govern our lives.6 For instance, if longevity runs in your family, that’s great. And if you are one of the many Canadians with a drug plan, that’s a big plus too.

Beyond that, health issues begin to get complicated. Stewart says he’s a proponent of healthy lifestyles that include exercise, nutrition and the moderation of social vices like alcohol. He says that a healthy regimen may keep you fit overall, but it won’t guarantee you’ll hit 90.

Stewart says positive factors involving health are linked: Exercise builds muscle, helps control weight and leads to better sleep. Sleep restores the body and also helps us deal with stress. Better stress control allows us to deal better with life’s addictions, including junk food and booze, which in turn can help control weight, prevent diabetes and give us a better overall outlook in life.

One thing that Stewart will say adamantly is that smoking can definitely shorten your life and can bring on many afflictions, the most obvious of which are cancer and cardio-pulmonary diseases. Check out Adam Stewart’s Top 7 Health To Dos.

Plan to be secure at 90

One simple consideration to help feel financially in control at 90 is to save early, save more and have a plan to make it happen, according to Sandra Bussey, a High Net Worth Planner with TD Wealth. But she also says people should start thinking about a whole lot of other financial questions that may influence how much they need to save.

The major decisions can include, when do you want to retire and what kind of lifestyle would you like when you get there? Getting these questions right early precludes less welcome thoughts you may have to think about like, how long will you be forced to work to meet a savings goal, or what kind of income you’ll be forced to live on?

For example, how much of your retirement savings you will consume each year will have a big impact on how long the savings will last and therefore, how much you may need to save. While it’s a matter of debate and personal preference, Bussey says, the rule of thumb is that we need 70% of our working income in retirement. That number presumes that mortgage payments are gone, work-related expenses like clothing and transportation costs are eliminated.

However, everyone is different. If indications are correct that people will be healthier for longer, you might have a higher rate of activity at that age than your parents did, perhaps running up more travel costs and packing in more trips to the golf course. In any case, turning your mind to what you want to do in retirement and how much it will cost can help take some unknowns out of the equation, Bussey says.

As well, thinking about a retirement savings plan might include a myriad of other possible life expenses ranging from paying for a child’s master’s degree to funding a spouse’s enhanced health care for the last 20 years of their life. While it’s hard to make decisions about your life decades in the future, about amounts of money that have yet to earned, Bussey says people should begin to consider what’s involved and how different life goals pull at your money at different times, even if the primary goal is to have a comfortable life at 90.

What saving early can do

Bussey illustrates the potential benefit of saving early with a scenario. In her example, she compares two couples, Dai and Min and Noah and Agathe, who embark on two different savings plans.

The long-term effect of saving early and aggressively

Dai and Min saved $130,000 by the time they're 45. So did Noah and Agathe, but that's where the two couples' savings journeys diverge. Only one couple plans to have retirement savings past their 90th year.

At 45, Dai and Min annually save

$14,150

At 45,Noah and Agathe annually save

$16,700

Dai and Min annually increase their contributions by 2%

Noah and Agathe annually increase their contributions by 1%

At age 52, Dai and Min are now saving $16,254 annually and have accumulated

$339,358

At age 52, Noah and Agathe are now saving $17,696 annually and have accumulated

$363,773

At age 62, Dai and Min are saving $19,813 annually and have accumulated

$779,303

At age 62, Noah and Agathe are saving $19,382 annually and have accumulated

$831,875

About this chart These scenarios are built on the assumption that both couples have a combined TFSAs of $130,000 starting at age 45 and receive an average return of 5% on their savings. Each couple invests $10,000 ($5,000 by each spouse) annually in TFSAs starting at age 35 until age 45 when further retirement savings are made. Dai and Min contribute $14,150 in RSPs to their retirement fund at age 45 and increase this by 2% annually while Noah and Agathe contribute $16,700 to a mix of RSPs and TFSAs and increase it by 1%. Both defer and max out their CPP and OAS. Both wish to retire on the equivalent of 70% of their working salary. Dai and Min retire at age 65 and Noah and Agathe retire at age 67.

In most ways, the couples are alike: They are the same ages and both make combined salaries of $150,000 before tax. Both started saving at age 35, putting $10,000 in their Tax Free Savings Accounts (TFSA) each year so that by age 45, each couple has about $130,000 in overall savings. At age 45, they both begin saving at an increased rate in their Retirement Savings Plans (RSP). (For a list of all assumptions made in the calculations, see below the chart).

Noah and Agathe have set their retirement target at age 67, a bit later than what’s traditional, and plan to save enough so that they can live on 70% of their working income until their 95th year. To reach that goal, they save $16,700 at age 45 and increase their rate of saving by 1% annually until they retire at 67. Their retirement deposits consist of a mixture of the $10,000 they have already been saving in TFSAs plus $6,700 in their RSPs.

Dai and Min also have a savings plan but it’s less defined. They begin depositing $14,150 at age 45 just in their RSPs, increasing that amount by 2% annually. They plan to retire at 65 but may not have given much thought to how long their savings will last.

As you can see on the chart, the results are telling. Even though Dai and Min are increasing their savings annually at a higher rate and — by the time they are 60 years old — they are saving more money annually than Noah and Agathe, they will have run out of their retirement funds by age 80. Although they may still be eligible for Old Age Security (OAS) and Canada Pension Plan (CPP), there’s a chance they may need to drastically adjust their lifestyle.

Noah and Agathe however will have enough funds to support their preferred lifestyle until they are 95. They achieved this by saving more and saving it earlier and by bringing the power of compounding to bear on their retirement savings plan.

What delaying retirement can do

Bussey says there may be other considerations beyond finding more dollars to sock away. For example, the fact that people are healthier in their senior years, means that the traditional retirement age of 65 may not work for everyone. If people are enjoying their jobs, can physically meet the challenge and put off their leisure years, working into your late 60s can be both realistic and make a tremendous impact on your financial situation. In the scenario Bussey presents, Noah and Agathe plan to work a couple more years than Dai and Min, which delays the point at which they begin drawing on their funds, allowing the funds to continue growing. Delaying retirement and putting off CPP and OAS, means savings can accumulate instead of being depleted.

On the other hand, your goal may be to stop working and enjoy retirement as soon as possible. Many others will gradually edge into retirement by working part-time for a while before packing it in completely. Any of these decisions can impact a retirement plan positively or negatively.

There may be other factors that come into play, few of which can be anticipated when you first begin saving for a retirement. Spouses don’t necessarily retire on the same day, for instance. If you had children late, they may still be living at home at the time of your planned retirement. As well, you may find yourself caring for elderly parents, or even providing for three generations of family simultaneously.

Don’t just save, have a plan

It all comes down to each person’s individual situation says Bussey. But she emphasizes that everyone should be saving for retirement, starting early and saving an amount that synchs with their goals. Time can be an ally if you make a quick start on saving, or an adversary if you let years slip by without saving for retirement. Plus, she says having an overall plan is paramount, a plan that ties everything together — what’s important to you now, your concerns on the far-off horizon and what you can likely expect in between.

DON SUTTON

MONEYTALK LIFE

ILLUSTRATION

VERONICA PARK

WEB DEVELOPMENT

ELLE HONG

  1. “The Canadian Longitudinal Study on Aging Report on Health and Aging in Canada: Findings from Baseline Data Collection 2010-2015,” Canadian Longitudinal Study on Aging, May 22, 2018, accessed Oct. 1, 2019, www.clsa-elcv.ca/stay-informed/new-clsa/2018/canadian-longitudinal-study-aging-releases-first-report-health-and-aging.

    Sara Harper, Mark Walport, “The Future of an Aging Population,” The Government Office for Science, 2016, accessed Oct. 3, 2019.

  2. Office of the Chief Actuary, “Mortality Projections for Social Security Programs in Canada,” Statistics Canada, April 2014, Accessed Oct. 1, 2019, http://www.osfi-bsif.gc.ca/Eng/oca-bac/as-ea/Pages/mpsspc.aspx#fnbtbl6
  3. Laurent Martel and Janet Hagey, “A portrait of the population aged 85 and older in 2016 in Canada,” Statistics Canada, May 3, 2017, accessed Oct. 1, 2019, www12.statcan.gc.ca/census-recensement/2016/as-sa/98-200-x/2016004/98-200-x2016004-eng.cfm
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  5. “The Canadian Longitudinal Study on Aging Report on Health and Aging in Canada: Findings from Baseline Data Collection 2010-2015,” Canadian Longitudinal Study on Aging, May 22, 2018, accessed Oct. 1, 2019, www.clsa-elcv.ca/stay-informed/new-clsa/2018/canadian-longitudinal-study-aging-releases-first-report-health-and-aging.
    Andre Picard, “New study aims to provide clues on how Canadian seniors can age healthily,” The Globe and Mail, May 21, 2018, accessed Oct. 1, 2019, www.theglobeandmail.com/life/health-and-fitness/article-new-study-aims-to-provide-clues-on-how-canadian-seniors-can-age/
  6. “Social determinants of health and health inequalities,” Statistics Canada, June 28, 2019, accessed Oct. 1, 2019, www.canada. ca/en/public-health/services/health-promotion/population-health/what-determines-health.html