Is a long life overrated? How important is it for you to live to age 90 or even 100? My guess, based on various surveys I have read on the subject, is that these goals may not be important. It seems that many of us attach more significance to the quality of our lives life and how we spend our time, rather than on how long we live.

I certainly could not agree more with that idea! It is true that there are many benefits to pursuing a lifestyle that may allow us to live long, but I think placing greater emphasis on how we experience (and hopefully enjoy) life is far more meaningful and important. And even if we follow all the right guidelines for extending our longevity, our time on earth is inherently unknown and not something we can completely control.

Longevity Is Not Unimportant
However, questions about longevity are nonetheless worth thinking about as you approach mid-life. This actually becomes quite important for those who have recently experienced job loss, are thinking about career change, and/or are considering the possibility of retirement in the short or medium term.

These transitional points in mid-life often bring into focus the need to think about new lifestyle goals, to consider different priorities about what will create happiness in their next life chapter, and the financial goals and needs for a different life phase.

When it comes to thinking about your future, and especially one’s financial plans, the question of how long you may live is one of the key ingredients in a financial planning recipe , even while most of us understandably place greater focus on the qualitative aspects of living.

That is due to the reality is that at some future time, you will no longer have income from work (assuming you are not yet retired), either by choice or because you can no longer do so. Your life expectancy then frames an important financial planning goal which is to understand how long your money will need to last.

You May Not Need a Crystal Ball to Plan for Longevity
Of course, there are many unknowns in trying to guess at a number. Statistically, there are a great many factors which influence your lifespan, from your race, gender, income, genetics, psychology and more. However, the good news is that you don’t need to use your scientific calculator to come up with a reasonable number!

Most of us are also very aware that life expectancy has been increasing, and actually quite substantially over the past three decades. For example, according to the Social Security Administration’s 2019 Periodic Life Table (Based on 2016 data), there is a 75% chance that a 65 year old couple will live until age 85 (one living to that age), while there is a 49% chance that one will live to age 90.

The numbers for today’s 65 year old single individuals are also very good, but not quite as favorable as couples. A 65 year old male, according to the same Social Security Administration table, has a 44% and 23% chance of attaining age 85 and 90 respectively, while for single women the chances are a little better at 55% and 34%.

What are the implications for these numbers? For planning, I recommend that you carefully evaluate three important factors:

1) Consider That You Will Live a Long Life, Even If You May Not!
2) How Long Will Your Money Need to Last?
3) How You Experience Life May Be the Most Important Thing!

Consider That You Will Live a Long Life, Even If You May Not!
Many of us should think about a long life expectancy of age 90 or even 100. In my opinion, this is a prudent and conservative financial assumption, not an overly optimistic guess about how long you may live, which is truly unknowable.

The longer assumption about lifespan is a reasonable way to make sure your money does not run out before you do! My recommendation does not mean that every one of us should use a long timeframe as a planning assumption.

Your health status and many other personal factors should be certainly considered and may lead to a using a shorter lifespan. But before doing so, you really need to carefully consider the possibility, even if low, that you may live a long life.

Using a shorter lifespan assumption may backfire if you are wrong and if you do not have financial resources to sustain your expenses past the less “optimistic” date you might use. This is especially true because the pace of healthcare innovations is continuing. if not accelerating.

It is true that the high rate of life expectancy growth over the past few decades may not grow as quickly in the future. However, what happens to you if the scientific breakthroughs continue and that recent fast rate of lifespan growth continues in the future? I recommend that people consider a longer lifespan, even if improbable, to reduce the potentially negative impact of this unknown planning variable.

How Long Will Your Money Need to Last?
Many of us have heard that retirements can last as long as 30 years, which means you would want to feel confident that your money can endure for at least that period of time. That may be a very reasonable assumption to use depending on the age when you leave the workforce, your marital status and other sources of income (pensions, Social Security, savings, etc).

For example, the longevity statistics indicate that a couple retiring at age 60 may have a combined lifespan as long as age 90 (44% according to the previously cited Social Security table). Remember, those same statistics also suggest there is a 23% chance that same couple could have a lifespan to age 95, which would be 35 year retirement timeframe.

However, I would certainly not recommend “defaulting” to a 30 year retirement timeframe assumption. The timeframe must reflect your specific situation. For couples or young retirees, I have used retirement timeframe assumptions as long as 50 years, although this is certainly rare! Conversely, a single male retiring at age 70 might use a 15 to 20 year timeframe, and not a 30 to 35 year timeframe, depending on his health and other considerations.

How You Experience Life May Be the Most Important Thing!
The famous comedian Groucho Marx is known to have said: “Age is not a particularly interesting subject. Anyone can get old. All you have to do is live long enough”. I think there is a real wisdom in this quote when thinking about your future.

You do not have to an expert statistician or prognosticator when thinking about your finances and how long you might live. The age is not the important thing – what is far more significant is how you choose to spend the next chapter of your life.

If that time is spent cultivating and sustaining important relationships in your life, pursuing your interests (especially those aligned to your personal values), and maintaining a positive mindset, you may have a very good chance of attaining the most important goal: being happy!

The purpose of money is, in my opinion, to simply enable the lifestyle and activities that may produce joy and deep satisfaction. As part of that philosophy, a professionally prepared financial plan has great potential to help you organize your finances around your highest priority lifestyle goals and to help you feel confident about your finances. Making an appropriate and thoughtful assumption about your longevity is one of the most important pieces of approaching the type of thoughtful planning that I advocate.

Serendipitously, by pursuing financial goals and lifestyle choices that create deep satisfaction, the chances of finding the fountain of youth and a happy, long life expectancy may grow significantly! Please do not hesitate to contact me if you wish to discuss your circumstances and how to apply these principles to your situation.