I am sure that, sometime in your life, an insurance agent or financial advisor has suggested that you need to protect your family from the financial hardship that would occur if the breadwinner in your home were to die at an early age.

The financial product that gives us that protection is called life insurance.

But, what happens if, instead of dying early, the breadwinner lives to be in their mid 80s or 90s? Shouldn't there be “longevity insurance” to protect us if we live much longer that we expect, or worse — much longer than our retirement money lasts?

I am seeing an alarming pattern among today's seniors. They are living much longer than they thought they would and did not financially plan for that to happen.

Many retirees are faced with either returning to the work force to earn more money, or downgrade their lifestyle to fit into the decreased budget.

I can assure you that they never anticipated having to make either of those decisions.

The fact is that we are living longer today than ever before. Just last week I had a client come in my office to discuss her Medicare options.

She was in very good health and told me that she works out at the gym three days a week. She took only two medications and described her lifestyle as very active. I was flabbergasted when I asked her birthday and I found she was born in 1915!

I would have guessed her age to be in the early 70s, but never would I have guessed her to be in her early 90s.

Retirees today can expect to spend 25 plus years in retirement.

Early retirees (those that retire prior to age 65) can expect to spend 30 to 40 years in retirement. For some people that is as long, if not longer, that the time they spent in the work force. This increased longevity comes at a cost.

The biggest expense seniors will face in their retirement years is the cost of healthcare.

Some estimates claim that healthcare costs for retirees in the next decade could consume 60 percent of their retirement income.

So how can seniors ensure themselves that they can make their nest egg last forever?

A few simple steps can help get you on the right track. First, you must realize that it is critical to have a plan. A plan really is not a plan until it is on paper. If it is not on paper it is merely an idea.

It is absolutely imperative that professional help is sought to plan out the proper course of action.

Seniors should meet with a financial advisor at least five years prior to retirement to discuss an “income distribution plan.”

“Income distribution” is the planning-on paper-of how to make the money you spent your whole life accumulating, lasts the rest of your whole life.

In many cases this plan will include reallocation of your portfolio to a more conservative position, as you are less able to endure the volatility associated with a more aggressive portfolio while you are in retirement.

Seniors that did not reallocate in the late 90s discovered the hazards of a bear market first hand, when the market lost double digits three years in a row. Many advisors are now recommending a much safer and easier to understand portfolio for people nearing retirement age and are utilizing a relatively new product called an “indexed annuity.” I call it longevity insurance.

Indexed annuities are just over a decade old and have really come into prominence since the market crash of 2000.

Some annuities (variable annuities) have received bad press in the past few years and should not be confused with these new indexed annuities.

Indexed annuities are not invested in the stock market and are not subject to market volatility or negative market returns.

One of the unique features of an annuity is the income for life feature that allows you to begin an income stream that you cannot outlive!

There are many types of indexed annuities, and they all work differently, so you should seek the guidance of a qualified advisor before putting any of your money in an indexed annuity.

Another area that must be addressed in this plan is the issue of “Long-Term Care” (LTC).

Long Term Care Insurance (LTCI) is NOT health insurance-it is asset insurance. LTCI is complex and it can be very confusing, however, it is absolutely necessary for any person with significant assets (over $200,000) to have a good LTCI plan in place.

In our area LTC costs can exceed $50,000 per year! If you do not have an adequate LTC plan, all of your assets could be wiped out in no time.

I will dedicate future columns solely to this topic, as it is such an important issue.

The important thing for you to do is to recognize the need to meet with your advisor and begin the process of putting your plan together. Financial advisors have many tools available to them today that did not exist just ten years ago.

So, if it has been awhile since your last visit with your advisor … it is time to give them a call.

George Harris Jr. is a 20- year veteran of the insurance and investment industry. He is a licensed insurance agent and a registered representative, offering securities through Avalon Investment and Securities Group, Inc., Muscle Shoals, Ala., Member FINRA-SIPC. If you have questions or comments, or have a topic you would like him to cover, he may be reached at his Gulf Shores office at 251-968-1234 or via email at george@georgeharrisfinancial.com