Do you have enough money to last the rest of your life? A critical variable in answering that question is how long you will live.  It may be longer than you assume.

The graph below shows the average life expectancy in the US based on a person’s current age. Keep in mind, 50% live longer than the average.  The graph also shows the age 10% will reach—again many of which will live even longer.

The data does not parse out the impact of factors such as work environment, diet, exercise, genetics, and health history.  Those may have an impact but again perhaps not as expected.  For example, my cardiologist suggests family history is more predictive of heart failure than cholesterol levels.

Our goal is to use whatever information we have available to make reasonable and somewhat conservative estimates of client life expectancy.  If we assume too short of a life span, we risk the client running out of money at a point when they cannot generate additional income.  If we assume too long of a life span, we risk discouraging actions or goals they could well afford to take.  Neither outcome is attractive to our clients or to us.

Please engage thoughtfully with your advisor to help set and test a range of reasonable assumptions.