When it comes to retirement planning the downer part or aspect comes down to the big question. How Long Will We Live? Nobody lives forever and the flip side of that is the bummer to talk or think about. That being, how long before we die. If only we knew because it is important to get-real about our own longevity chances as it plays a huge role in our retirement funding equation. From savings goals to overall withdrawal strategy. Getting it wrong can cause an unnecessarily delayed retirement date or worse, retiring and then eating through all of our savings before we leave the planet.

How Long Will We Live?

Why It’s Important to get the ANSWER right.

I admit to avoiding contact with life insurance and long-term care sales persons. I just hate hearing the pitch. Dealing with our death is the downer part of any financial planning. It needs to be done but most of us hate to deal with it.

With retirement planning the issue of our eventual death adds a different aspect. Instead of deciding to buy life insurance to cover our premature departure from the planet, retirement planning requires our figuring out our probable longevity to make sure we don’t overspend or unnecessarily under-spend our retirement funds while in retirement. After all, we all want as enjoyable of a retirement as we can afford to have.

Getting OUR answer as close to “correct” as possible means having an appropriate retirement plan. Coming up with a likely life expectancy age allows us to make more informed withdrawal and investment decisions.

If I knew we only had 10 years left to live I would certainly rethink our budget and life plans. There would be a lot of different financial decisions made than if I came up with another 35 years of living to do in retirement.

It is not pleasant to bet on our own longevity. However this downer part of retirement planning is extremely necessary. Even though it isn’t easy or an exact science there are ways to make an educated guess (scratch that) prediction.

So how do we answer the question of how long will we live?

I mentioned in my post “My Disappointing Retirement Financial Plan” that my financial planner started off by running the numbers to support us until age 100 for me and 105 for my wife. I then came up with better age numbers.

Sure, if you have the portfolio to carry you to age 100 or beyond when running your numbers through a retirement calculator  then go ahead and use age 100. But many of us don’t have that kind of retirement financial backing to get a calculated result guaranteeing a likely 100% chance of funding success or one with a minimal chance of failure.

I have never met anyone age 100 or have known of anyone in our family that has lived that long. Yet according to data at the U.S. Census Bureau it seems there are now 70,000 people over the age of 100  in the United States. That is twice the number of Centenarians than there was 20 years ago. Do I think my wife and I will too? Not likely.

If not age 100, how long will we live?

The 3 steps I used to answer that question. 

Family History- Of course everyone’s answer will be different. First look at your family history. That is the first clue. Then look at your family’s health and habits.

• Was there something there that shortened their longevity and health?
• Do you share in the same health and/or habits? Live healthier than they do/did?
• Do you have relatives living well into their upper 90s and beyond?

Obviously this isn’t an exact science but it is easy to see if longevity runs in the family.

Actuary Table – Another thing to do is look at the Federal actuary tables  to see what they predict. They are pretty good at this game. Social Security, insurance annuities, all kinds of financial decisions are made as far as payout based on the fed’s actuary data.

This data is just where the majority of people will fall. Obviously some win and live longer and some lose by leaving the planet earlier. It’s just a number to show the law of averages and where you can get a base line longevity number to compare to your family’s longevity history.

Longevity Calculator – We all love to run our numbers through retirement calculators. I use the free FIRECalc all the time. It allows for changing our thoughts on longevity to see our portfolio’s chance of lasting as long as we will. There are now longevity calculators to help us getting a little closer to the big answer to the how long will we live question so that we work with the right length of time.

I used the free longevity calculator Livingto100.com.  It will have you enter in specific personal aspects of your life like your health and health habits, family history, etc. Basically it has 40 questions to answer and it provides an educated longevity prediction result.

Answering the questions requires taking the time to be honest about your habits, not your hopeful health habits. Rerun the numbers using changes in your lifestyle if there are areas you want to improve in and see how it impacts your longevity results.

The questions cover the following areas:

• The age of your parents/siblings now or the age they passed away.
• Whether you smoke or used to smoke and at what age you quit.
• Your diet regarding vegetable, fruit, red meat and processed meat consumption.
• Your height and weight.
• Your dental hygiene habits. Particularly whether you floss your teeth since gum disease is a predictor of heart troubles.
• Do you exercise and if you do how often.
• Your Water, coffee, and alcohol consumption.

The longevity calculator runs your answers and comes up with a probable longevity age to use in our retirement planning.

Making Sense of the numbers. Finding the right age to use.

Nothing we do to figure our longevity number will be absolute. We won’t really know until we actually expire. We can take some comfort knowing that the age we come up with will be better than just picking a number out of the blue.

What I did was take the numbers I got by using family history, the actuary table, and the longevity calculator results and then rounded-up the highest of the numbers I found.

For example: The history of longevity for males in my family – Mid-40s to Early 70s. Actuary table shows age 81 for me. Longevity calculator resulted in my predicted age 87.

I then rounded up my highest number found of 87 to age 90 to use for my retirement plan. Running my numbers through the retirement calculator with an age of 90 for me and 95 for my wife shows a 100% chance of funding. Running calculations using an age 100 for me and 105 for my wife as my financial planner first used came up with a less-than 100% success rate. That is why having a realistic number (age) to use is important in planning.

In Conclusion

Do I really think I will make it to age 87? Not really. Not when I consider what I have seen in my family history. But it’s best to plan for the higher number. Trying to figure out the “how long will we live” question or in other words figuring out the age we will likely die by is the downer aspect of retirement planning but one worth trying to get right.

It is also a real motivator to live a well-lived life on our own terms. Early retirement is doing just that for us.

Have you taken the time to figure it out? You know, answering the how long will you live question.