Recently, an older woman approached me about getting some life insurance. She is in good health and close to retirement age. Her main reason was to make sure she left something to her grown children.
One unique facet of her situation is the longevity in her family. This woman’s mother lived to age 98 and father to age 89. And most of her older relatives all made it to their 90s. I told her that given her family history, the only way she wouldn’t see age 100 is if she got run over by a bus.
We also discussed the merits of term insurance versus permanent, but of course the question everyone has – but no one knows the answer to – is how long will I live?
According to the Social Security Administration, the life expectancy for a male age 65 today is 83. For women age 65, it is 85.
In this case, the woman was trying to decide between a long term policy or a permanent policy. This question also affects retirement planning, long term care and related issues.
Each day you live, your life expectancy goes up. Life expectancy is an average – averaging in those babies who died at 1 day old all the way to people who live to 100+. Well, each day you live, you beat the odds by not having died that day.
And don’t forget about advances in medical technology and such.
Well, we can’t really predict the future, but we can look to the past and present for some guidance. Things like our family history as well as our own activities (e.g. smoking) all affect life expectancy.
This recent article in US News and World Reports discusses this issue and has links to two calculators.
http://finance.yahoo.com/news/Predicting-Your-Own-Life-usnews-2407689382.html?x=0
So how old will you live to? I ran the calculator on myself and apparently I’ll see age 81.
Answer to the last trivia question: B - $75,000. Interestingly, it doesn’t take a lot of money to be happy, but as income increases, the level of happiness tends to level off. After all, rich people still have issues with money – but they just are different issues than poor people have.
This week’s trivia question: According to a study by the Employee Benefits Research Institute, what percentage of Americans currently aged 56 – 62 would run out of money to pay for basic retirement expenses if they retired at age 65? Is it?
A – 10%
B – 26%
C – 47%
D - 63%
