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How long do you think you’ll live?

Posted by Jill Boynton  November 22, 2010 10:34 AM

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Most financial planners use a life expectancy of between age 90 and 100 when creating retirement plans. Clients are often surprised that we assume such a long life span. Yet life expectancy tables show that we’re not being unreasonable, especially for women.

Life expectancy tables give an “average” expected length of life, which means that the average person of a particular age can expect to live to the stated age, and 50% will live beyond that age. As a person gets older the life expectancy changes. For instance the 2006 census life expectancy tables indicate that at age 30 a male is expected to live to age 77, but if that same male reaches age 50 his life expectancy changes to age 79.

CSO mortality tables indicate that 20% of males will live beyond about age 87 and 20% of females will live beyond age 90. Health care improves rapidly such that each generation is living a few years longer than their oldest parent or grandparent. In financial planning life expectancy is an important component of our retirement plans. We can’t know for sure at what age we will die, so it is prudent to err on the long side. This is one area where it’s better to overestimate than underestimate.

This blog is not written or edited by Boston.com or the Boston Globe.
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ABOUT MANAGING YOUR MONEY
Local finance professionals share insights and advice on issues such as budgeting, managing debt, and retirement planning.

About the contributors

D. Abraham Ringer is a CERTIFIED FINANCIAL PLANNER practitioner and a Financial Adviser with Morgan Stanley Global Wealth Management in Boston. He is registered in MA, NH, NY and several other states to which his articles are directed. For more information please visit www.morganstanleyfa.com/ringer
Financial Planning Association™ of Massachusetts has 900 members who specialize in the financial planning process. Many of its members engage in philanthropic pro bono work in their communities, recommend legislation, elevate public awareness, promote financial literacy, and advocate for sound economic and tax policies.
Odysseas Papadimitriou is the founder of CardHub.com, a credit card and gift card marketplace, and WalletHub.com, a personal finance site. He has more than 13 years of experience in the personal finance industry, and previously served as senior director at Capital One.

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