What can you learn from Herb?

This morning I dropped my truck off at the Dodge dealership to have a small repair done. A nice old man named Herb drove me back to work. We started by discussing the terrible weather lately and then got into a conversation regarding his retirement oddly enough. Here is his story in a nutshell:

He has been retired now for 12 years. He spent the first 9 years traveling Central America. He settled in Guatemala due to a host of reasons (Panama/Costa Rica too expensive, El Salvador/Nicaragua too dangerous, nothing to do in Honduras). He started a NY Deli business and employed 5 locals to help out. Apparently he lost money on the whole endeavor. After 9 years in Central America the money ran out and he returned to Fort Collins to become a shuttle driver for the local auto shop. His reason for running out of money: I never planned to live this long.

Now he could not have been much more than about 77 by my guess which fits pretty well with the standard retirement age of 65. I was sitting there thinking...what? You really expected to be dead by 77? Hmmm...so I went out and checked the stats. Sure enough the average life expectancy in the US is currently running about 77 - specifically w/ white males at 75.7. More interestingly, I ran across this little nugget:

Life expectancy changes as one gets older. By the time a child reaches their first year, their chances of living longer increase. By the time of late adulthood, ones chances of survival to a very old age are quite good. For example, although the life expectancy from birth for all people in the United States is 77.7 years, those who live to age 65 will have an average of almost 18 additional years left to live, making their life expectancy almost 83 years.

I bet you Herb had not heard about that one....and probably would have planned a little differently had he known that fact. Now I am not advocating that you only plan to live to the average life expectancy...I would think most of us plan to live to be a 3 sigma event. The point is that we should not make the same mistake... Don't forget that if you live long enough to enjoy the retirement you are currently saving for, then you are likely to live an extra 5 years longer on average!

As a side note to all this conversation about retirement planning, Herb also made me laugh at 8am...something not very easy to do before the first pot of coffee sets in. Here was what he said:

Herb: "You want to make God laugh?"
Rob: "Sure"
Herb: "Make a plan."