How long will I live? When it comes to retirement, longevity is the most common concern people have. Will my money last me my whole life? What happens if I live longer than I expected or planned? We can choose the day we retire. We can make educated guesses on how long our retirement will last, but the reality is nobody knows for sure how long they will live. The one thing we do know is that people are living longer than they ever have before. Most recent actuarial databases show that an average male will live to 84 and female to 871. However, when asked, most people underestimate the likelihood that they will live past this average age.
The chart below shows the probability of a 65-year-old living to various ages. As you can see, the likelihood of living into your 90’s is 50%, but the really interesting fact is when we look at a couple. There is a 50% chance that one of you will live to 95!
Given this information, when designing a retirement income strategy, we cannot plan just “TO” life expectancy, but we have to plan “THROUGH” life expectancy. This means for most people who retire around age 65, they will need to plan for 30-35 years in retirement and maybe longer.
*Source: https://www.longevityillustrator.org 2019 Social Security Administration mortality table, with future mortality improvement projected using the Society of Actuaries’ MP-2021 scale.