Investing For a Longer Life

Demographic changes and rising health care costs may mean it’s time to rethink traditional retirement investing strategies.

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84.3 statistic icon

Average life expectancy of a 65-year-old American man

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Average life expectancy of a 65-year-old American woman

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Retirement requires more thought than ever

People are living longer and more active lives, prompting many to rethink traditional views on retirement.

Rising health care costs, diminishing defined-benefit pension plans, and the uncertain future of Social Security all pose challenges and risks for retirees. Are you prepared to fund two or three decades of retirement? Here are some things to consider.

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    If you’re currently working …

    Fewer workers supporting a burgeoning retiree population will likely impact programs like Social Security and Medicare you may be counting on in your retirement.

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    If you’re in retirement …

    Living longer may require rethinking your investment strategy to help reduce the risk of outliving your assets.

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    If you’re looking for investment opportunities …

    The full impact of these demographic shifts may not be felt for years, but you might want to think today about positioning your portfolio to take advantage of trends on the horizon.

Tracie McMillion

Investing For a Longer Life

Watch our video to learn how demographic changes may impact how you plan for retirement.

View transcript

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A Change in Demographics

The life expectancy of today’s retirees is longer than in years past and continues to grow. But changing demographics and rising health care costs pose challenges.

Health Care Spending Per Person in the U.S.

Health Affairs, Bureau of Labor Statistics, 2016. Adjusted for inflation.

The Cost of Care

Longer life spans often equate to increased health care costs, especially for older Americans. Thankfully, healthy life expectancies, or the number of years one can expect to live in full health, are on the rise due to better living conditions and advances in medical care.

Still, the average lifetime health care premiums for a 65-year-old healthy couple retiring in 2015 and covered by Medicare parts B, D, and a supplemental insurance policy will be $266,589, according to a report from HealthView Insights. Add on other out-of-pocket expenses, including dental and vision, and that number jumps to nearly $400,000.

The Reshaping of American Society

Over time, older age groups are expected to become a higher proportion of the U.S. population. The result is likely to be fewer younger people in the workforce per retiree to provide support for programs such as Social Security.

Age < 14

Age 15 – 64

Age ≥ 65

Source: U.S. Census Bureau, International Programs, International Data Base, March 2017

Enjoying a longer, healthier life largely depends on the steps you take today to take greater charge of your financial well-being for tomorrow.

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5 Planning Ideas to Consider

The demographic and health changes noted above could profoundly affect your financial stability. To help prepare, work with your Wells Fargo investment professional to consider the following strategies:


of affluent investors said saving for retirement is harder than they anticipated.


of affluent investors said they should have started saving for retirement earlier.

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Opportunities in Today's Environment

The implications of these shifts for investors could be profound. As people live longer, we at Wells Fargo Investment Institute see a variety of potential investment opportunities.


Dividend-paying stocks may be attractive for older investors looking for alternatives to low-interest-rate bonds. Pharmaceutical and biotech companies could benefit as more people live with manageable ailments.

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Demand for longer-dated bonds should be supported despite their low interest rates. Municipal bonds are a tax-advantaged approach to generate income streams, but we expect they will generate low-single-digit returns in the coming years.

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Real Assets

Real estate investment trusts (REITs) that invest in medical office buildings may benefit from the aging trend, and the longevity trend could benefit demand for income-producing investments, including Master Limited Partnerships (MLPs).

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Alternative Investments

Private capital strategies may include lending to small- and middle-market companies developing pharmaceuticals and medical devices or providing growth capital to emerging economies.

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Is Your Portfolio Ready?

The downloadable version of this special report includes additional information and strategies, as well as more statistics on changing demographics around the world.

Download the Full Report

Click or tap ‘View Report’ to get the full version of “Investing For a Longer Life.”

For assistance with your investment planning or to discuss your specific needs, please contact your Wells Fargo investment professional or click here to learn more about investing options through Wells Fargo.