How Long Will You Live?
Have you ever wondered how long you might live?
Understanding life expectancy is crucial for planning a secure and fulfilling future.
In my latest blog post, YouTube video and podcast episode I explore the dramatic changes in life expectancy over the past century, why it’s expected to continue increasing, and how this impacts your retirement planning.
You’ll learn:
- Has life expectancy actually doubled since 1900?
- How fast life expectancy is increasing.
- Why life expectancy is expected to increase.
- How long you can expect to live from today,
- How long you should expect to be retired.
- What age should you plan for to be confident you will never run out of money.
- Why is it important to invest for growth AFTER you retire.
- What you need for an awesome retirement.
The Journey of Life Expectancy
Life expectancy has seen remarkable changes over the past century. Since 1900, it has nearly doubled, increasing from 48 years to 83 years. This significant rise is due to several factors:
- Curing Main Killers: Diseases like tuberculosis, diphtheria, and measles, once major causes of death, have been largely controlled.
- Reduced Child Mortality: Child deaths under age 5 have decreased by 97%, thanks to better healthcare. These early deaths used to heavily reduce average life expectancy.
- Fewer Accidents at Younger Ages: Improved safety and medical care have reduced the number of young lives lost to accidents.
The Future of Life Expectancy
Life expectancy continues to rise at an average rate of 2 years per decade.
In the next 40-50 years, it’s expected that the average life expectancy will surpass age 90.
Despite this, many young people today are unaware of this trend.
Influenced by news and social media, they may not realize that the world is continually improving, especially in free enterprise democracies where science, new discoveries, and free enterprise drive progress.
Your Life Expectancy Today
Your life expectancy from today is higher than historical averages, assuming average health.
For example, if you are 65 years old, your average life expectancy is around age 90.
Here’s a useful table from the Financial Planning Standards Council (FPSC) for planning retirement:
Age | Male (50%) | Female (50%) | Male (10%) | Female (10%) | Last Survivor (50%) | Last Survivor (10%) |
65 | 89 | 91 | 98 | 99 | 93 | 101 |
70 | 89 | 91 | 97 | 98 | 92 | 100 |
75 | 88 | 90 | 96 | 97 | 91 | 99 |
- M = Male, F = Female, M/F = Last survivor of a couple.
- You can see that the average life expectancy is the 50% survival rate.
- For planning purposes, a 50% chance of running out of money is not reassuring.
- To be confident you will never run out of money, use the 10% columns. There is still a 10% chance of one person being alive and out of money, but this is relatively low.
- We usually plan to age 100.
- Financial plans are customized based on known health conditions that significantly reduce life expectancy.
Retirement Planning
The average retirement age is 62. For people aged 62 or 65, there is a 50% chance one will reach age 94 and a 10% chance of reaching age 101. This means your retirement could last more than 30 years and possibly up to 40 years!
Investing for Growth in Retirement
This longevity highlights the importance of investing for growth even after retirement:
- Long-term Horizon: If you are retired, you likely still have a long-term time horizon.
- Post-Retirement Growth: 70-88% of your retirement income is generated from growth after retirement. For instance:
- 82-88% for an $80,000/year retirement.
- 70-80% for a $150,000/year retirement.
- Consistent Risk Levels: Generally, the investment risk level you had before retirement is also suitable after retirement.
Common Misperceptions
Many investors without a financial plan believe:
- Older people should invest more conservatively.
- Spending decreases significantly after age 80.
However, our experience shows that retirees with both health and money tend to spend as much in their 80s as they did when they were younger, often shifting from active travel to more luxury travel. Maintaining your lifestyle is key for most people.
Achieving an Awesome Retirement
To ensure a comfortable and fulfilling retirement, you need both health and money. You can plan for a longer lifespan, healthspan, and wealthspan.
For more insights, check out my recent post: How to Have a Long Lifespan, Healthspan & Wealthspan with 3.0 Level Thinking.
Planning for a longer life is crucial for securing your financial future. With proper planning and investment strategies, you can enjoy a fulfilling and stress-free retirement.
Ed
Planning With Ed
Ed Rempel has helped thousands of Canadians become financially secure. He is a fee-for-service financial planner, tax accountant, expert in many tax & investment strategies, and a popular and passionate blogger.
Ed has a unique understanding of how to be successful financially based on extensive real-life experience, having written nearly 1,000 comprehensive personal financial plans.
The “Planning with Ed” experience is about your life, not just money. Your Financial Plan is the GPS for your life.
Get your plan! Become financially secure and free to live the life you want.