One of the biggest risks anyone faces within their financial plan is longevity. The chances for maintaining financial security naturally decreases as one lives longer. In the real world none of us knows what our expiration date is. One tool we can turn to when trying to determine our “life plans”- whether those be financial related or a “bucket list”- is the averages. Sure, it’s not perfect, but at least it gives you a sense of what you and your family should be prepared for.
For example, take a couple where the husband is age 75 and the wife is 74. There is a 54% chance that at least one of them will live to see 90. What about the century mark? There is almost a 10% chance that one of these individuals will see 100. Of course it’s the chance that either spouse attains these ages that most couples are concerned with- they want to ensure there are funds available to support both of them until the second death.
These statistics are based on a life table developed in 2004 by actuaries given historical data at that point in time. This does not compensate for healthcare improvements and general lifestyle awareness which will continue increasing these odds as the average life expectancy is extended due to these trends. This is certainly a key item to consider as one makes decisions affecting their long-term plans.
