Recently, I had a long chat with my broker. The subject was how long I could be expected to live and how that projection could affect my investment funds. My mother is 100. Assuming I inherited her longevity genes, I could go on for another 20 years. My father and his two brothers died much earlier so I’m not guaranteed a long life. But it’s possible. If you’re interested in your own prospects, The Society of Actuaries (Click) provides actuarial tables.
Until recently, life expectancy has been on the increase, particularly between 2001-2009. (“Retirement’s Scariest Question” by Ben Steverman, Bloomberg Businessweek, Nov. 7-13, 2016, pg. 51/). Middle Age white Americans have lost some ground of late, because of alcohol and drug abuse, suicide and liver disease.
If you survive middle-age, the good news is you have a chance of living longer than your actuarial projection. For a man, that’s 76 years. For a woman, it’s 81 years. (Ibid pg. 51) Because life expectancy varies with quality of life, calculations are tricky, say the editors of the Journal of the American Medical Association. A 40 year-old man who enjoys extreme wealth can live 14 years longer than a poor one. Level of education is a factor, too. A college-educated 25-year-old can expect to live a decade longer than the high school dropout of comparable age. (Ibid pg. 51.)
In the case of plagues, flu epidemic, natural disaster or war, all bets are off.
Given the variables, year over year mortality rates are as volatile as the stock market, which explains why my broker and I talked so long. The best advice about retirement I’ve discovered is to assume you’ll live beyond the actuarial expectancy of your age group. If you plan for a long life, you face no surprises at the end. The worst that can happen is you die with money to spare. Your heirs will be happy.
(First Published 11/30/16)