Using Life Expectancy To Help Plan Retirement

Don’t get stuck at the intersection. 

Don’t get stuck at the intersection. 

While talking about life expectancy can be a tough subject, it can also be extremely useful in financial planning for your retirement.  Recent studies into the financial habits of American families reveal that less than one quarter of persons over age 50 have written up a projection of their expected retirement income and expenses. 

While it’s not entirely a difficult process, it can only be assumed that most are afraid of doing it because of fear of the unknown as alluded to above, or may just not know how to proceed further.  Jonathan Pond’s team found a couple of web sites that do a great job of helping you get a handle on two critically important elements of sound financial planning:

  1. Estimating how long your money will last, and
  2. Estimating how long you’ll last.

Depending on the outcome, you can either rest easier knowing that you’re not going to risk outliving your money or you can figure out what you need to do to make sure you get to that enviable position. We have previously described a great financial calculator web site, The site is rife with wonderful information accumulated over decades of the life of the late Bud Hebeler, including his free retirement planner. This week, we highlight a site that will help you get a handle on how long you’ll live.

This site contains a brief questionnaire based on data gathered from the New England Centenarian Study that examined the health habits of centenarians and their offspring. One of the authors of both the study and the questionnaire is world-renowned gerontologist Dr. Tom Perls. After answering the simple questions, you’ll receive an estimate of your life expectancy. If you don’t like the result, you can change some of your health habits to extend your life expectancy. The site also provides some advice and directs you to other web sites that will provide more information and guidance pertaining to a particular health topic.

We especially like this site because it provides a reality check for those many people, both working age and retired, who don’t realize how long they’re likely to live. Life expectancies are rising so we need to plan financially for that possibility.

So, as they say, “there’s no time like the present.”  The great thing with financial planning and budgeting, is it can never be too late to start in most instances.  For those in retirement, or on the verge of, what strategies have you implemented?  Feel free to share your advice and tips for others below!