Author Archives: Edward Brownlee

Retirement: Longevity Risk

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In the TIAA Institute and George Washington University’s Global Financial Literacy Excellence Center (GFLEC) measure of Americans’ financial literacy, nearly two-thirds of U.S. adults were unable to correctly answer the one question that is perhaps the most pertinent when it comes to retirement financial planning: expected life expectancy.

The exact wording of the question depended on whether the respondent was male or female. For males, the question was:

“What is life expectancy among 60-year-old men in the U.S.?” Respondents were given four choices:

  • About 16 more years (age 76)
  • About 22 more years (age 82)
  • About 28 more years (age 88)
  • Don’t know

Female respondents received the identical question, except that it focused on the life expectancy of the average 60-year old woman, and the multiple choices listed different ages.

The correct answer for men is about 22 more years—until the age of 82. For women it is 25 more years, until age 85. Only 37% of all respondents got the question correct.

These results help to explain why relatively few retirees use annuities as part of their retirement planning and financing. If they don’t appreciate the very real risks of outliving their money (longevity risk), then they will tend to under-emphasize the benefits of a guaranteed lifetime income provided by annuities.

It’s worrying that this percentage is so low. As Annamaria Lusardi, a George Washington University professor and GFLEC’s Academic Director, pointed out, “if we want to create better retirement outcomes, we need to start by making sure people understand how long they are going to live in retirement.”

References:

  1. Mark Hulbert, Most People Can’t Answer This One Life-and-Death Question, Barron’s, January 14, 2023.

Retirement Dilemma and Social Security Benefits

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In the past, the primary retirement goal for most Americans was to have an employer provided secure pension and guaranteed healthcare insurance lasting for as long as they lived, writes Martin Neil Baily, senior fellow at the Brookings Institution and former Chairman of the Council of Economic Advisers under President Clinton, in a Barron’s article.

Today regarding retirement, Americans must fend for themselves, relying on their own savings and investments, and figuring out how to avoid running out of money.

With little fanfare, America has moved from a world of traditional pensions, where risks were absorbed by employers, to a system of individual retirement accounts where families must manage uncertainty including the fact that none of us knows how long we will live and what large expenses we may face, especially in healthcare.

There has been transformation in America’s retirement system from traditional pensions to individual retirement accounts and employers’ 401K plans.

The risks for a secure retirement have been partly mitigated by Social Security and Medicare, the foundation of the American retirement system. The programs have, for the most part, been successes, sharply lowering the poverty rate among the elderly and providing a backstop for middle-income households. For decades, Social Security and Medicare have lifted American seniors, survivors, and people with disabilities out of poverty.

Unfortunately, these federal programs are not on a sound financial footing thanks in part to Washington‘s dysfunction. The Social Security* trust fund for retirement and survivors’ benefits is expected to run out of money and reduce benefits to recipients in 2033, while the Medicare** hospital fund could run out in 2028. Thus, older Americans can now add policy uncertainty to their list of risks to retirement.

Americans are willing to take on the challenge of managing their own retirement, but they need additional federal government help to do it.

The first step towards solving the ‘retirement dilemma’ is for Americans to save enough, consistently. The best way to do this is through automatic retirement savings plans, like 401(k) plans. Employees would be enrolled in the plan automatically when hired, with contributions taken out of paychecks unless they chose to opt out. The self-employed can set up their own plans but it would help if state governments, or the federal government, would operate retirement savings plans open to everyone.

Current tax law favors retirement savings, but the benefit of this tax break, worth over $250 billion a year, accrues mostly to the rich. Tax reform should redistribute the benefit more equally to encourage middle-income families to save.

Saving a solid retirement nest egg is not enough. Savers don’t know what returns they will earn on their savings. Family members don’t know how long they will live (people often underestimate their lifetimes). They don’t know if they will need in-home care, or if they will have to enter an expensive nursing home. (Many families hoard their financial assets for fear they will need all their savings for end-of-life care).

What may be needed to help fix retirement is a good financial advisor, and a reformed retirement system.

Annuities are a way to avoid market and length-of-life uncertainty, but at present it is hard to find the right annuity at the right price. Employers should negotiate with providers to offer their employees the option of putting some of their retirement savings into an annuity that guarantees regular monthly payments, either throughout retirement or to protect against running out of money at the end of life. It is a way of creating an individualized “pension” plan.

Today’s workers need a retirement plan that is flexible and can move with them. The downside means that retirees are exposed to a lot of economic and market risks. Yet, reasonable policy reforms can invigorate insurance markets to help ameliorate risks. Employers owe it to their employees to make it easier to build a secure retirement.

References:

  1. Martin Neil Baily, The Way Americans Retire Has Changed Forever. Why Saving a Nest Egg Isn’t Enough. Barron’s Magazine, February 17, 2023.

* Social Security is a federal benefits program that pays benefits to retirees and workers who are disabled, as well as their family members and survivors. It is financed through a 12.4% tax split among employers and employees; self-employed individuals pay the entire 12.4%.

This tax money is deposited into the two Social Security trust funds: the Old-Age and Survivors Insurance (OASI) Trust Fund and the Disability Insurance (DI) Trust Fund. The Social Security Administration pays current benefits and administrative costs out of these trust funds.

As early as 2034, Social Security trust fund will no longer be able to pay full benefits scheduled under current law. Although the trust funds’ projected shortfalls are typically attributed to lower birth rates and increased life expectancies for workers.

** Medicare has been a successful component of the American social safety net.

As of September, 65.1 million people were covered, 85 percent of them elderly. 
It is also expensive: During fiscal 2022, the program accounted for $710 billion in federal spending, which was 11.4 percent of the $6.2 trillion total, according to the Congressional Budget Office.

By 2028, the Medicare trust fund, which pays for hospitals, skilled nursing facilities and hospices, and is financed by payroll taxes, is expected to be exhausted.

Inflation: Everyone Experiences It Differently

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Inflation and rising prices erode your purchasing power.

The national inflation rate ended 2022 at 6.5%, after peaking at 9.1% in June—a rate not seen in more than 40 years. The inflation rate had averaged 4% from 1972-2022, according to the US Bureau of Labor Statistics.

No one can be sure how long inflation will stay elevated above historical averages but it could stick around longer than anyone would like. Regardless, not everyone experiences inflation in the same way. You may find your expenses rising faster than your friend in another part of the country or more slowly than your next-door neighbor.

Since everyone experiences inflation differently. Fidelity’s analysts parsed mountains of government data on inflation rates and spending patterns.

Fidelity identified 4 key factors that can make inflation different for everyone.

  • Where you live: Inflation varies widely by region. The northeast tends to have lower inflation than the national average, while the southeast and mountain west tend to be higher.
  • How old you are: People spend money on different things at different stages of their lives. We used data from the US Bureau of Labor Statistics to inform how people in various age groups tend to spend their money.
  • Do you rent or own? If you’re renting you aren’t insulated from price increases as much as you are if you own, and especially if you’ve paid off your mortgage.
  • How much do you drive? The price of gas was a huge driver of inflation in the past year.

Answer these 4 questions and get an estimated inflation rate that may better reflect the impact of rising prices on people like you than the national headline inflation rate. Knowing where you stand can help you plan.

With the price of food and energy rising fast, inflation is already hitting most Americans right in the budget. A recent analysis from Moody’s Analytics found that the average household is spending almost $460 more per month because of inflation. As you look for ways to tighten your belt, keep an eye on your budget. Fidelity suggests spending no more than 50% of your take-home pay on essential expenses like food and housing, to give you room to save for retirement, plan for short-term goals, and spend on nonessentials.

References:

  1. https://www.fidelity.com/learning-center/trading-investing/inflation-quiz
  2. Moody’s Analytics, “Fed isn’t popping champagne,” FinancialMirror.com, 08/12/2022, https://www.financialmirror.com/2022/08/12/fed-isnt-popping-champagne/
  3. https://www.fidelity.com/learning-center/personal-finance/how-to-beat-inflation

Health Benefits of Eating 100 Percent Cacao

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100% cacao or dark chocolate with at least 70% cacao is ‘good for you’ When it comes to the excellent health benefits that come from the 100 percent cacao bean – the scientific evidence couldn’t be stronger in its favor. 100 percent cacao protects against everything from high blood pressure to heart disease and it’s full of antioxidants.

Cocoa powder is made from cocoa beans, which come from the plant Theobroma cacao L. Cocoa beans are the primary ingredient in chocolate, but they can also be ground into cocoa powder. The powder provides many potential health benefits.

Health Benefits

Cocoa powder provides tons of benefits, especially if your powder is at least 72% cocoa. Here’s a look at some of the health benefits of cocoa powder:

Impact the positive benefits of the 100 percent cacao. In short, dark chocolate (the darker the better!) is great for you.   Here’s a breakdown of the science behind the cacao bean:

Full of Protective Antioxidants

The Journal of the American Medical Association reports that 100 percent cacao is absolutely packed with antioxidants. Antioxidants bind to what are known as ‘free radicals,’ destructive molecules that are implicated in heart disease and other ailments, and decommission them. “Our findings indicate that milk may interfere with the absorption of antioxidants from chocolate,” reads the AMA research, “And may therefore negate the potential health benefits that can be derived from eating chocolate.”

The proof is in this study: a group of test subjects were given a 100 gram chocolate bar every day, but the contents of the chocolate varied. On different days they each ate either 100 grams of dark chocolate by itself, 100 grams of dark chocolate with a small glass of whole milk, or 200 grams of milk chocolate by itself. Afterwards, the scientists measured the amount of antioxidants in their blood. Those who ate the dark chocolate alone had the most total antioxidants. And they had higher levels of epicatechin, a particularly healthy compound that is found in 100 percent cacao. The milk chocolate eaters had the lowest epicatechin levels of all.

100 Percent Cacao Chocolate Also Lowers High Blood Pressure

In one excellent study, subjects with high blood pressure were broken into two groups. Every day for two weeks, they all got a 100-gram chocolate bar (lucky test subjects!) Half the patients got dark chocolate and half got white chocolate. Those who ate dark chocolate had a significant drop in blood pressure (by an average of 5 points for systolic and an average of 2 points for diastolic blood pressure). Those who ate white chocolate saw no benefits.

Indeed, 100 percent cacao chocolate is so healthy that the University of Michigan’s “Healing Food Pyramid” includes it as a key component. As they explain, 100 percent cacao boasts all of these benefits:

  • Contains flavonoids called procyanidins & epicatechins; flavonoids are part of a group of antioxidants known as polyphenols and are found in a variety of foods including dark chocolate, tea, and various fruits and vegetables
  • Decreases LDL (“bad”) cholesterol oxidation
  • Reduces the risk of blood clots
  • Increases blood flow in arteries and the heart
  • May improve mood and pleasure by boosting serotonin and endorphin levels in the brain
  • Regular intake is associated with better cognitive performance in the elderly
  • Contains a number of minerals, including calcium, magnesium, and potassium

 

References:

  1. https://paleoproteinbrownie.com/pages/the-health-benefits-of-eating-100-percent-cacao-chocolate
  2. https://www.webmd.com/diet/health-benefits-cocoa-powder

Four Types Of Exercise Can Improve Your Health And Physical Ability

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Research has shown that it’s important for older Americans to get all four types of exercise or physical activity:

  • Endurance (aerobics),
  • Strength and Resistant,
  • Balance, and
  • Flexibility.

Each exercise or physical activity has different benefits for your health and well-being. Additionally, doing one or more kind of exercise can improve your ability to do the others, and variety helps reduce risk of injury and promote healthy aging over the long term.
Endurance exercises for older adults

Four Types of Exercise infographic. Click to open infographic webpage.

Endurance activities or aerobic exercises increase your breathing and heart rates. These activities help keep you healthy, improve your fitness, and help you perform the tasks you need to do every day. Endurance exercises improve the health of your heart, lungs, and circulatory system. They also can delay or prevent many diseases that are common in older adults such as diabetes, colon and breast cancers, heart disease, and others. Physical activities that build endurance include:

  • Brisk walking or jogging
  • Yard work (mowing, raking)
  • Dancing
  • Swimming
  • Biking
  • Climbing stairs or hills
  • Playing tennis or basketball

Increase your endurance or “staying power” to help keep up with your grandchildren during a trip to the park, dance to your favorite songs at a family wedding, and rake the yard and bag up leaves. Build up to at least 150 minutes of activity a week that makes you breathe hard. Try to be active throughout your day to reach this goal and avoid sitting for long periods of time.

Gauging your exercise intensity

When you’re being active, try talking: if you’re breathing hard but can still have a conversation easily, it’s moderate-intensity activity. If you can only say a few words before you have to take a breath, it’s vigorous-intensity activity.

References:

  1. https://www.nia.nih.gov/health/four-types-exercise-can-improve-your-health-and-physical-ability

Regular Exercise Is Essential for Healthy Aging

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“Exercising regularly, every day if possible, is the single most important thing you can do for your health. In the short term, exercise helps to control appetite, boost mood, and improve sleep. In the long term, it reduces the risk of heart disease, stroke, diabetes, dementia, depression, and many cancers.”  ~ Harvard Medical

Getting and staying in shape is just as important for seniors as it is for younger people.

Regular physical activity or exercise helps maintain a healthy blood pressure, keeps harmful plaque from building up in your arteries, reduces inflammation, improves blood sugar levels, strengthens bones, and helps stave off depression, according to Harvard Medical. In addition, a regular exercise program can make your sex life better, lead to better quality sleep, reduce your risk of some cancers, and is linked to longer life.

Seniors stayIng physically active throughout the day by taking the stairs, doing yard work, and playing with your grandkids is vitally important.Hundreds of studies conducted over the past 50 years demonstrate that exercise and staying physically active helps you feel better and live longer.

To change the way you experience exercise, you can follow these tips to make workouts more enjoyable.

1. Mix it up. Change the activities you’re doing and the amount of time spent on each. Sign up for a Pilates class or try tai chi. Even a change of scenery can keep you motivated and active. For example, try a long weekend hike in the woods instead of some shorter neighborhood walks during the week. Choose combinations and activities that appeal to you. Whatever you choose, it’s best to be active at least three to six days a week.

2. Keep moving. Look for ways to add activity and recreational exercise to scheduled activity time—an extra lap around the mall when you’re shopping, some stair climbing, or a Saturday morning bike ride.

3. Wear a pedometer and heart rate monitor. A step-counter can up the ante on exercise, according to a 2018 review of six studies. Over all, those who wore a pedometer raised their physical activity by up to 3,000 steps a day compared with those not using a pedometer. In a classic review of 26 studies, published in The Journal of the American Medical Association, in addition to taking more steps a day, pedometer wearers lowered their systolic blood pressure by 3.8 points and lost weight compared with nonwearers. Setting a step goal counted for a lot. Those who did so significantly increased activity; those who didn’t generally remained at baseline.

A heart rate monitor (HRM) can help you exercise more effectively and efficiently. Heart rate monitors measure your heart rate while working out, which can help you reach your target rate safely and efficiently without exceeding your maximum heart rate. Exercise has dramatically different effects on the body depending on how high you push your heart rate and for how long. Training intelligently means using heart rate data to guide your workouts. Sometimes you might want to keep your heart rate relatively low to burn fat or pace yourself for a longer workout, but other times you might want to push it higher to build stamina. Heart rate monitors help you learn more about your level of fitness, train more effectively, and track your progress.

4. Plug in. Turn on your computer and power up with the great range of individual exercises and workouts from these organizations:

  • The American Council on Exercise offers an extensive library of exercises sorted by ability level, muscles targeted, or equipment needed, at www.acefitness. org/exerciselibrary. You can also view selected exercises in motion.
  • The Centers for Disease Control and Prevention posts video clips describing intensity levels as well as aerobic and strength exercises for home and gym. Easier variations on strength exercises are included. Go to www.cdc.gov/physicalactivity/ everyone/videos.
  • Collage Video sells a wide range of exercise videos. Find them at www.collagevideo.com.

5. Rise to the challenge. If your workouts aren’t challenging or interesting enough, expand your horizons by focusing on both exercise and healthy eating. The Presidential Active Lifestyle Award, at www.health.harvard.edu/PALA, encourages you to meet minimum physical activity requirements and also set healthy eating goals over the course of eight weeks, because it takes both to lead a healthy lifestyle.

References:

  1. https://www.health.harvard.edu/topics/exercise-and-fitness
  2. https://www.health.harvard.edu/exercise-and-fitness/starting-to-exercise#excerpt

 

Live Every Single Today

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“I have fought the good fight, I have finished the race, I have kept the faith.” ~ Apostle Paul, 2 Timothy 4:6-8

It’s important to live every single day without regret, with clear goals and with purpose

Bronnie Ware, an Australian palliative carer, wrote a book called The Top Five Regrets of the Dying. In it, she describes the five most common wishes she heard from her soon-to-depart clients.

  • I wish I’d had the courage to live a life true to myself, not the life others expected of me. Stringently adhering to cultural norms at the expense of your own passions will result in disappointment and bitterness.
  • I wish I hadn’t worked so hard. Time is non-refundable so if you spend it working, then you can’t spend it doing more meaningful things.
  • I wish I’d had the courage to express my feelings. It is only by being open and honest about your thoughts and feelings can you form genuine bonds with other people.
  • I wish I’d stayed in touch with my friends. It is dispiriting to be disconnected from those who truly understand you and accept you as you are.
  • I wish I had let myself be happier. The expectations and opinions of others should not prevent you from being happy with who you are. Moreover, happiness can be found in the journey, not just the destination, which you often never reach.

Another regret heard most often is:

I wish I’d taken better care of my health.  Most people do not think about their health until they experience a health challenge.  And at that point, we  make promises to ourselves that if we get better we’ll do a better with our health and well-being. But, I t shouldn’t take a major health challenge to get us to prioritize and focus on our health, fitness and diet. Your body must be your major priority and should be cared for. Nourish it with healthy food, exercise it daily and get a sufficient amount of sleep. Small healthy habits every day will compound and make a big difference over the long-term.

Never give up on yourself

Life and how you live it everyday is a choice. It is your life. Choose consciously, choose wisely and choose honestly. Choose happiness and focus on what is good and positive. Always be grateful.

References:

  1. https://www.psychologytoday.com/us/blog/life-s-biggest-decisions/202106/the-6-most-common-regrets-people-experience
  2. https://www.forbes.com/sites/ericjackson/2012/10/18/the-25-biggest-regrets-in-life-what-are-yours/?sh=63f5f3f6488

Health: There are No Limits

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“Once you pass the age of fifty, exercise is no longer optional. You have to exercise or get old.” ~ Dr. Henry S. Lodge. M.S., Younger Next Year, pg. 113.

People tend not to exercise because they are tired at the end of the day, But, in reality, people are tired at the end of the day not because they get to much exercise of physical exertion, explains Dr. Henry S. Lodge. M.D., leading NY internist and Columbia Medical School Professor. Instead, people are tired at the end of the day because they do not get enough exercise and as a result, they are not fit.

People are mentally, emotionally and physically drained and exhausted from being sedentary, states Dr. Lodge. Study after steady demonstrates that productivity increases and an individual functions better each day when they are fit. In short, time spent exercising and getting fit is life enhancing and extending.

So, make daily exercise a habit or routine like taking a shower or brushing your teeth. In short, your body craves the body’s chemical reaction resulting from exercise and movement.  So it’s important for you to “Do Something Everyday”.

Start exercising at a level that matches your current level of fitness, Dr. Lodge urges. Start out a level that is hard enough to make you sweat like walking at a brisk pace for twenty to thirty minutes. But, before you get started, check with your medical doctor.

Getting and staying fit is wonderful if you’re healthy, but it’s essential and life saving if you’re not healthy. Your life will improve dramatically once you commit to the habit of regular exercise.

Your long term endurance exercise goal should be to do long and slow aerobic exercise for three hours or more at 60% to 65% of maximum heart rate for three hours without getting exhausted.  You should be able to do something like an all morning bike ride for three hours or more well into your sixties, seventies, eighties and nineties.  You should make a real commitment to do something like that at least once a month

If you can get to the level of three hours or more of endurance exercise and stay there, life will be good, says Chris Crowley, New York Times bestselling co-author of “Younger Next Year”. Crowley recommends that you:

  1. Exercise six days a week for at least 30 minutes for the rest of your life.
  2. Do serious aerobic exercise four days a week for the rest of your life.
  3. Do serious strength training, with weights or body weight, two days a week for the rest of your life.
  4. Eat healthy foods and drink plenty of water. Quit eating crappy food like refined sugar, refined carbs and processed foods.
  5. Maintain close relationships and social connections.
  6. Get adequate sleep and reduce stress.
  7. Have an attitude of gratitude.  Always be grateful.

“Open heart surgery is hugely popular these days, apparently because so many guys prefer it to learning about aerobic exercise and working out.” ~ Chris Crowley, Younger Next Year, pg. 116.

Crowley believes that it’s possible that Americans, as a society, “can be radically healthier, more energetic, more fit, more optimistic and effective by making modest, behavioral changes. Putting off 70% of today’s aging is a simple matter: Move a lot more!…quit eating crap!…connect with others!, he emphasizes.” The combination of sedentary lifestyle  and the crappy food we eat is wrecking Americans lives and ruining the economy. The nation spends “20% of our national income on health care”. Half of the amount spent on healthcare could be saved “because 50% of our bad health is simply the result of the ridiculous way we eat and live.”

Final thoughts…staying deeply connected with and caring about family and friends and others are essential for healthy aging and longevity. Staying in touch… caring… is hugely important.

References:

  1. Chris Crowley and Henry S. Lodge, M.D., Younger Next Year, Workman Publishing, 2nd Edition, New York, December 24, 2019.
  2. https://www.youngernextyear.com/bios/

“Younger Next Year: Live Strong, Fit, Sexy, and Smart―Until You’re 80 and Beyond” – According to authors Chris Crowley and Dr. Henry S. Lodge, M.D., men 50 or older can become functionally younger every year for the next five to ten years, and continue to live like fifty-year-olds until well into their eighties. To enjoy life and be stronger, healthier, and more alert. To stave off 70% of the normal decay associated with aging (weakness, sore joints, apathy), and to eliminate over 50% of all illness and potential injuries.