July 13, 2023
When developing a financial plan, one of the variables we have to decide on your longevity. When we say we run our plans to 95 or 100, most people look at us aghast and say I don’t want to live that long. But if you do? Your money needs to continue to support you.
Below are some rather startling statistics as to why it is important to assume you will live a long life. Remember we’re not discussing the quality of your life as an older person, but that you are alive and money is being spent.
According to a paper by Dr. Paul Cox of the Birmingham Business School, the probability of surviving to age 95:
One person in a couple:
1 in 4
1 in 3
1 in 2
Some of these numbers may vary depending on the source but you get the idea. Going further out, according to the Huffington Center on Aging at Baylor College of Medicine, a person currently 65 has a 9.6% chance of reaching 100.
The numbers quoted for life expectancy are frequently averages. Recall that average means there is 50% who died earlier but 50% who will die later. It is the probability that gives us more incite. Add your current health, our access to health care and you could be living longer. Your money may need to last a long time!
Speaking of variations. We found the following map. We were astonished at the variations in life expectancy depending upon your geography.
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