Should your DNA affect your retirement planning?

February 24, 2012

| Money Rates Columnist

Despite all of the numbers and ratios surrounding it, retirement planning is not an exact science. You want to put enough away in your savings accounts to live comfortably throughout your golden years, yet knowing precisely how long those will last -- and accordingly, how much money you'll need -- is impossible.

But while you can't know exactly when you'll die, some of the latest developments in DNA research make it possible to tease out genetic traits that may offer clues about the length of your life. Could tests like these someday impact your retirement planning -- particularly if you learn your lifespan may stretch beyond the average?

Telomeres and aging

Research has indicated that your telomeres may offer some useful clues about your potential lifespan. Telomeres are pieces of DNA found at the end of chromosomes. As people age, their telomeres shorten. Shortened telomeres can also signal an increased risk for heart disease. According to a University of Copenhagen study, shortened telomeres are linked to an increased risk of heart attack and early death by 50 and 25 percent, respectively.

Life Length is a manufacturer planning to roll out a blood test to measure telomeres. The test, expected to be available in Europe and Asia this year, will cost $700. A member of the company's scientific advisory board told ABC News last year that the test would be able to predict within a decade an individual's biological age -- a potential clue in determining the person's lifespan.

But if a $700 test doesn't sound prudent to you, it's not the only thing you could use in estimating how long you''ll live. Since longevity -- or the lack of it -- runs in some families, looking to your parents and grandparents can offer some insight on what kind of lifespan you might expect.

Longer lives for everyone

Once you have some clues on how long you may live, what can that information mean for your retirement? Certainly, you don't want to quit saving for retirement -- even if you don't think you'll make it much past age 65. Medicine has come a long way in recent years. Consider the fact that the average life span was only 47.3 years for those born in 1900, and is now 77.9 for children born in 2007. Make no mistake: Your father's death at 59 is no reason to short-change your retirement.

So how much do you need? Perhaps more than you think. Recent data from the Bureau of Labor Statistics says that the average 50-year-old will spend $1.4 million on their way to age 81. Those who hit age 100 can expect spending during the second half of their lives to top $2 million.

In addition, centenarians aren't a rarity anymore. The Census Bureau estimates there will be more than 600,000 individuals aged 100 or older by 2050. At the same time, the Census Bureau estimates the average retirement age will actually drop. In 2050, it estimates the average age at retirement will be 63. So while the average retirement period is expected to be nearly 22 years, centenarians will need enough in reserve to cover at least 37 years.

Adjusting your retirement strategy

A recent MoneyRates.com study on retirement savings projected that an average spender, assuming a 30-year retirement, would need roughly $370,000 in savings when he or she quit working. And while many savers may outlive that 30-year projection -- which would end at age 95 if the person retired at 65 -- it's worth noting that the costs can build quickly for those who live past that time, since medical and long-term care costs are often substantial for those past age 95.

So if you expect to potentially live to 100, it could be worth it to bump up your savings beyond the normally recommended figures. If fate steps in and you don't reach the century mark, the worst-case scenario is that you might leave a little more cash than you expected to your loved ones.

If the figures begin to get confusing, the best advice may be to consult with a financial planner. A professional can help clarify a lot of these questions, and offer you various options for achieving a secure retirement.

Just don't forget to mention any 102-year-old grandmothers you may have.

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