How long could your retirement last?

Why you won’t run out

The most important fact when planning retirement funding is not your savings, but how long they will need to last. This can lead to stress for many retirees who are concerned about running out. But this stress can be managed quite easily by using reliable information to more accurately predict your own life expectancy – as well as that of your partner.

The team at Retirement Essentials has worked hard to produce a calculator that helps you move beyond the ‘how long is a piece of string’ guess work many retirees struggle with. Here’s what you need to know about life expectancy and how to calculate your own so you can then create more accurate retirement income forecasts. 

Today we’ll look at the overall facts of life expectancy, what influences your likelihood of living a longer life, some helpful hints from a doctor who has made this her life study – and how using the numbers helps you plan ahead.

What does life expectancy mean?

We hear a lot about longevity and how many Australians are living much longer than their parents did. But what does this mean for individuals? Longevity can refer to the ability to last a long time and humans are now living longer lives than previous generations. Life expectancy is more specific. It is the statistical measurement of the average life span of a population. In this case, when we consider Australia, children born today can expect to live until 85.4 for girls and 81.3 for boys. Medical science is evolving at a rapid pace, so the longer you live, the longer you are likely to live.This means that today’s 65-year-olds can currently expect to live to 88 for females and 85.3 for males. But, as these are averages, half the population will live longer, and half will die before this age.

Factors which influence your life expectancy include:

• Gender: Women generally have a higher life expectancy than men.
• Country of birth: Life expectancy varies from country to country, with high-income countries having higher life expectancies than low-income countries.
• Income: People with higher incomes tend to have longer life expectancies than people with lower incomes.
• Education: People with higher levels of education tend to have longer life expectancies than people with lower levels of education.
• Healthcare: Countries and regions with better healthcare systems tend to have higher life expectancies.
• Lifestyle factors: Smoking, obesity, and lack of physical activity can all shorten life expectancy.

The recently released Retirement Essentials Life Expectancy calculator has been designed to show you the probabilities of you living to or beyond the average life expectancy. We offer these calculators for both singles and for couples as this information can richly inform the timespan you wish to plan for when it comes to funding your retirement.

Here’s a couple of images which help explain how this works.

Singles life expectancy

For singles, there is just one line which shows the probability of the average person of your age and gender being alive in any given year. For instance, the following chart shows that Marie, who is currently 64, has an 81% chance of being alive in 2039, aged 81.

What about couples?

The couples chart is slightly different. It has four lines. As you scroll over, four different results reveal the probabilities of both or one of you being alive at a certain time.

In this instance, for Carol (born 1959, currently 64) and Arthur (born 1954, currently 69) there exists:

• an 85% likelihood Carol will be alive in 2037, aged 78 
• a 64% chance Arthur will be alive in 2037, aged 83
• a 95% chance one of this couple will be alive in 2037, and
• a 55% chance that both will be alive in 2037.

So that is confusing.  Do Carol and Arthur need to plan for another 15, 20 or maybe 30 years?  And do they need to plan their expenses for 1 or 2 people?

Here’s a link to the Retirement Essentials Life Expectancy calculator so you can see the probability of your own (hopefully) longer life. This information can quickly and easily be used in conjunction with a Retirement Forecast consultation so you are dealing with more accurate forecasts of financial needs.  The consultation will help you work out how long your money will last under a range of different life expectancy scenarios. 

And for a bit of fun you can also try our quick two minute quiz.  Some of the answers surprised our team so see if you can get all three questions right. 

Is long life simply the result of good genes?

As we noted above, there are many factors that influence your life expectancy. None of them, happily, are set in stone and there is a lot we can do at any age  to improve our chances of living longer. It’s also important to understand the difference between being alive and being active. A recent article in Fortune magazine explains the difference between healthspan  and lifespan. 

It states that,

‘Lifespan is the number of years someone lives from birth until death, while healthspan is the number of years someone is healthy without chronic and debilitating disease. The earliest mentions of healthspan describe it as, ‘the maintenance of full function as nearly as possible to the end of life.’

Most of us would like to remain fit and active for as long as possible, so concentrating on healthspan is an essential ingredient in ensuring quality of life.

Mediterranean lifestyle secrets

Promoting longer, healthier lives is the specialty of Dr Catherine Itsiopoulos who is the Executive Dean of Health and Biomedical Sciences at RMIT University and Professor of Nutrition and Dietetics and author of four cookbooks on Mediterranean lifestyle and food and its benefits for those seeking an active longer life. Her most recent book is The Modern Mediterranean Diet. Catherine is a strong proponent of the maxim to put your health first. We asked her for her top tips on how retirees can do this. Here’s what she said:

1. Aim to have your main meal during the day and enjoy a slow lunch with your favourite people;

2. Make your favourite vegetable the hero of the meal with a small side of animal protein;

3. Swap out your cooking fats and salad dressings for extra virgin olive oil and drizzle it in all your salads and cooking;

4. Keep active everyday by going to the local shops daily for fresh produce and be inspired to cook fresh;

5. Keep a home garden by growing fresh herbs (even in pots) to flavour salads and cooked dishes (boosts flavour and healthy antioxidants and helps you cut back on salt);

6. After meals serve a platter of fresh fruit as the dessert.

In summary

To a certain extent how long we live has been pre-determined by our genes. But there is a lot more that we can do to maximise our ‘health span’. Why not make today the day you decide to put your health first?

What’s your take on living a longer life?

Have you tried our calculator?

And have you done our quiz?

Were you surprised by the results?