All retirees and pre-retirees need to think about their life expectancy a/k/a longevity. There are at least two important reasons for this. First, one goal of your retirement plan is to limit the risk that you will outlive your money. Second, anticipated longevity is a key factor in deciding the age at which you want to claim Social Security retirement benefits.
This raises the question of how long I will need to rely on income from my retirement accounts. Will it be twenty years until age 86? Or thirty years until age 96? Or do I expect (as some boomers do) to die before I reach age 79? (Age 79 is the typical break-even point calculated for total Social Security benefits received from early vs. late claiming.)
From my research, there are two relatively equal components of the longevity analysis: genetics and lifestyle.
Both of my parents are still alive at ages 89 and 86. However, both of my grandfathers and one of my grandmothers died at much earlier ages. This makes me think that lifestyle will be more critical to my lifespan.
So how do you estimate your personal life expectancy?
That’s where the Retirement Longevity Game comes into play.
You “play the game” by answering twelve questions about yourself. A few minutes later, an estimate of your longevity in years is displayed.
It’s is interesting to see how the life span estimate goes up and down in response to your various responses.
Playing the game, my estimated life expectancy is 93 years. If this age is even close to accurate, to be confident in a retirement plan that starts at age 66, I need my money to last 27 years. If I live beyond that, maybe I won’t care how much money I have!
One other advantage of playing the retirement longevity game: If your estimate is much shorter than you would like, it may kick you in the pants to make some lifestyle changes.
So what’s your number?