Life expectancy

Why is life expectancy is important to your retiment?

Knowing about how long you're likely to live is very important because.

Life expectancy and retirement planning

To know how much you are going to need in retirement you will need to know how long you are going to live, using a acturary table can help you understand how long that may be. Be careful when carrying out this exercise that if you see yourself only living to 70 and retiring at 65. What a lot of people will do is say OK I have to retire at 55 then and do not recheck their life expectancy.

Age of retirement

As you adjust your retirement age down, in most cases your life expectancy will go up. It is an inverse relationship. It seems once you are over a certain age it is better to keep working as people who retire very late in life often die straight after they retire.

Health

Obviously in most cases the healthier you are the longer you are going to live. Here health does not just cover exercise but also diet, well-being, family health, living conditions, lifestyle and where you live. This all has an effect.

However, most studies will show that exercise will have a positive effect on the length of life. One of the reasons for this is as simple as bowel movement. As study in a New York retirement home showed that the 50% of residents that took excursive, in a test, increased there bowel movement to the degree that food only stayed in them of under 24 hours. Residence that did no exercise had food in their bowel over 48 hours, over a certain stage that food starts to produce very nasty stuff that needs medication etc to sort out and has a direct effect on life expectancy and cost of care. So remember a small difference in health can make a big difference.

How is it calculated?

This is quite simple there is a group of people out there called Actuaries. They have long-term stats for millions of people who have lived and died over the past two hundred years. They take the closest match to you and then tell you the average of how long those people lived. It is very accurate, but with a few lifestyle changes you can definitely beat those averages.

To see how a retirement calculation is effected by life expectancy go here.