Planning Your Rest-of-Life: How Long Will You LIve?

When planning your rest-of-life, estimating how long you might live is an essential step for several reasons. First, you'll probably see that your financial resources need to last a long time--maybe longer than you thought--and you'll need to take this into account when assessing how much money you need. Second, it can be a wake-up call to help you think beyond the money issues to what you'll do for the rest of your life.

First, let's look at the numbers. Recent studies from the Society of Actuaries estimate the life expectancy for men as shown below:

Life Expectancies for Men

CURRENT            EXPECTED              EXPECTED
   AGE       REMAINING YEARS    AGE AT DEATH

     50                           31                                81
     55   27                                82
     60                           22      82
     65                           18                                83
     70                           14                                84

Source: RP-2000 Mortality Table

Here's the same information for women:

Life Expectancies for Women

CURRENT            EXPECTED              EXPECTED
   AGE       REMAINING YEARS    AGE AT DEATH

     50                           34                                84
     55                           29                          84
     60                           25                                85
     65   21                                86
     70                           17                                87

Source: RP-2000 Mortality Table

What strikes me first about these numbers is that there's really a lot at stake. Doesn't knowing that you may have 20 to 30 years left to live inspire you to want to make the most of those years? Isn't it worth spending some time now planning to get it right? Here's one way to look at it: Why not spend the same amount of time you'd take planning your next vacation and plan for your rest-of-life--a time span much, much longer than the typical two-week vacation!

Can You Beat the Averages?

Absolutely! And it doesn't take a rocket scientist to figure out how. The above tables show the "average" years remaining for both healthy and unhealthy people, all mixed together. If you make a few lifestyle changes (eat right, maintain healthy weight, get enough exercise, manage stress, stop smoking), you can improve your odds and add another five to seven years to your life expectancy. On the other hand, if you continue unhealthy habits, you'll most likely tip the time frames in the other direction and actually subtract five to seven years from your life!

So your next step is to estimate your life expectancy, taking into account your family history and your lifestyle. Many websites offer programs that can do this for you; one of my favorites is www.livingto100.com. This site has a neat feature: If you don't like the answer you get, it offers suggestions for enhancing your lifestyle to improve your life expectancy.

By the way, these same lifestyle enhancements will most likely increase your healthspan--how long you're healthy and living on your own. For many people, this can be just as important as increasing your lifespan. Many people I've talked with in the course of my work have expressed that they don't want to increase their lifespan if the extra years are spent suffering with severe medical conditions. But there are things you can do to stay healthy and increase your lifespan. See the video highlight clip described in the right sidebar for a great discussion of this topic.

Getting an estimate of how many years you have left should motivate you to make the necessary lifestyle changes that will enable you to live longer, live healthier and spend less money on medical and long-term care expenses. And a great side benefit is that you'll look and feel better now. The downside? You'll need more money to fund a longer retirement. That's why you need to consider your lifestyle and finances together when planning for the rest of your life.

Practical Applications

If you've ever used or plan to use software or an online program to estimate how much money you'll need for retirement, you'll most likely be asked how long you expect you'll need the income. This translates into estimating your life expectancy.

But here's where it's easy to make a critical mistake. There's roughly a 50 percent chance that you'll outlive your life expectancy--remember that it's just an average. So if you're planning to make your financial resources last for a period equal to your life expectancy, there's also a 50 percent chance you'll go broke before you die. Bad outcome for you, bad outcome for your spouse or adult children who might feel responsible for taking care of you!

In order to get the best idea of how much money you'll need in your rest-of-life, it's best to plug in a few different answers to the software to see the potential effect of living longer--say, five to ten years--than your current life expectancy. At the every least, you should plan in such a way that your financial resources will last if you (or your spouse) live for an additional ten years.

Estimating your life expectancy can also help you decide when to start receiving Social Security benefits. You can start your benefits as early as age 62, but there are significant increases in the monthly income if you delay starting your benefits beyond this age--you'll get the largest increase by delaying to age 70. But wait! Are you thinking that if you wait until age 70, you'd have foregone eight years of payments?

Let's take a closer look at this and talk about "break-even analyses," which focus on maximizing the total amount of Social Security income you'll receive over your lifetime. Will you get a larger lifetime income by starting at age 62 and receiving the smallest amount of monthly income for the longest possible time, or will you get more money by starting your income later with a larger monthly income but for a shorter period? The answer depends on how long you'll live. For instance, if you decide to wait until age 70 to start Social Security benefits and you die on your 70th birthday, you made the wrong decision! On the other hand, if you live to age 90, you made the right decision.

I've seen many break-even analyses of Social Security benefits, and they usually show that if you live to your late 70s or early 80s, delaying the commencement date as long as possible gives you the best chance to maximize your lifetime Social Security income. Go back and look at the above tables, which show the average ages at death for Americans to be in the early to mid 80s. This information supports delaying Social Security income as long as possible. However, half of Americans start Social Security income at age 62, the earliest possible age with the lowest amount of monthly income. I hope that these insights help Americans make smarter decisions about their financial resources, including Social Security.

What Should You Do With the Rest of Your Life?

Answering this question is a more profound way to use estimates of life expectancy. Suppose you work the numbers and determine that you've got another 20 to 30 years to live. Think back 20 or 30 years, and reflect on the changes that have taken place in your life and society during that time. How did your life turn out, compared to what you expected 20 to 30 years ago?

For me, I know I couldn't possibly have predicted how my life actually turned out. However, I did lay a good foundation for my future with a solid education, professional training, and the personal relationships I developed. And now, instead of planning to wind down my life in retirement, I'm laying a good foundation for the next 20 to 30 years. It's reasonable for all of us to expect just as many changes, twists and turns in the future as we experienced in the past. Being flexible and "going with the flow" might be a good attitude to adopt for our rest-of-life!

And while it's sobering to think that more than half your life has already passed, that realization can help you focus on what's really important. You still have time to reach your full potential during your retirement years, take care of unfinished business, spend time with friends and family, give back to your community, take care of your health, and pass along your legacy.

It takes substantial financial resources to be fully retired for 20 to 30 years, and many people, after running the numbers, realize they'll need to work longer than they'd hoped. But this shouldn't be a source of discouragement. Why not look at the bright side? Some studies have shown that working in your later years might actually extend your lifespan. These studies found that workers between the ages of 50 and 70 have significantly lower death rates than people who are fully retired. The reasons? No one knows for sure, but the reasons definitely include being engaged with life, having powerful reasons for getting up in the morning, and having enough financial resources so that you're not stressed about money.

And no one said you have to continue doing the same kind of work you do now. If you can't bear the thought of working in your current situation for many more years, try finding work that has meaning and purpose for you and fits your desired lifestyle. While that can be easier said than done, it may be your best course of action.

Parting Advice

"If I knew that I was going to live this long, I would have taken better care of myself."

-- Mickey Mantle

I'll bet that Mickey meant taking care of his physical health, but it's critical that you take care of all aspects of your life, including your emotional health and what you'll do with your time.

One poignant exercise to help you think about just what you want to do for your rest-of-life is to write your obituary--how do you want to be remembered? Then vow to live up to it. This can be the first step towards living the life you want--and you deserve no less!