[This post is written and copyrighted by FIRE Finance (http://firefinance.blogspot.com).]
[Continued from ARFS - Introduction]
Thanks primarily to advancements in medical technologies and drugs we are living longer than ever. As a result, chances are high that we may have to support ourselves for 20, 30 or even 40 years after retirement.
Figure 1 compares present and future life spans. Due to some misfortune, if we lose our ability to work and earn, our retirement savings (nest egg) may be our only source of sustenance. The situation becomes intricate due to relatively high costs of insurance and some possible big ticket medical expenditures that might come along as we age. Further, the younger generation (that is, us) has to shoulder the burden of a lot more elderly people than anticipated, which will probably lead to a collapse of the social security benefit system. We shall discuss this issue in our later posts so please stay tuned.
[Continued to ARFS - Introduction - Tension with Pension]