Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Re: life expectancy
Old 11-22-2006, 07:28 PM   #21
Recycles dryer sheets
 
Join Date: Feb 2005
Posts: 454
Re: life expectancy

on Kurzweil

Quote:
People simply need to live long enough—another 15 to 30 years—to live forever.
Quote:
Kurzweil isn't writing science fiction. In fact, Microsoft's Bill Gates, a robotics director at Carnegie Mellon University, an MIT professor, and a physicist have all endorsed his book. He has received the National Medal of Technology and the Lemelson-MIT prize. The directors of the National Institute of Health have asked him to speak to their members.
15 to 30 sounds optimistic to me, but you never know.

Someone who's 50 today could easily live another 50 years with just "normal" medical advances. Maybe by then, technology will be available to let people live to be hundreds of years old.

Or maybe not. But I'm not going to set up my retirement portfolio to be drawn down over time.
__________________

__________________
lazyday is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Re: life expectancy
Old 11-22-2006, 09:43 PM   #22
 
Posts: n/a
Re: life expectancy

Quote:
Originally Posted by HaHa
I think the whole concept of life-cycle asset liquidation as currently practiced and promoted by retirement calculators and "financial planners" is seriously flawed.

I've always been interested in money and paid attention to how people made their livings, and I will say that of all the people that I knew about-- grandparents, parents, aunts, uncles, etc- nobody voluntarily liquidated their savings in a planned way. Either they had been reasonably successful in business or farming, and they continued to hold some interests, buildings, farmland etc. that threw off income, or they owned income producing stocks which they held with the intention of holding until death.

If they were manager class people, they usually had pretty good pensions that took good care of them.

OTOH there were lots of poor old people- they weren't liquidating by plan, they were bleeding slowly and supported by kids, very frugal living, etc. Not a happy existence.

This idea will gain no traction now, but it may when/if market conditions change.

Ha
Well yeah, but how many of these folks that you knew ran Monte Carlo simulations, spreadsheets, and FireCalc runs like us anul-retentive folks here?

Most all of the older people in my family that had jobs and savings and pensions have far more money today than they can spend and freely admit it! - If they are still alive - They are dying each year. The ones that have meager resources also seemed to have a lot of problems throughout life - Unsteady employement, divorces, Alcoholism - But due to their lifestyle most of these folks died before age 70.

I think it is rather easy to calculate life-cycle asset liquidation - Especially with products like annuities - You can actually plan to die with a couple hundred thousand. - And Mikey the way you are planning you will probably die with $2 Million - Your choice, but I am going to spend it down a bit before I hit age 80.
__________________
  Reply With Quote
Re: life expectancy
Old 11-22-2006, 10:35 PM   #23
Thinks s/he gets paid by the post
 
Join Date: Jun 2005
Posts: 1,152
Re: life expectancy

I am not as optimistic on the rapid growth of life expectancy -- it looks more asymptotic to me, but I am still studying the issue as I am very interested in demographics as a hobby. The good thing is that as it grows so does overall productivity and probably your equity holdings. The average age of onset of disease symptoms that cause folks not to be able to work has increased markedly as life expectancy has increased. Doctors and sociologists do not fully comprehend all of the reasons, although there are a lot of good guesses. In fact, there is a lot of work going into figuring out what caused the life expectancy increases of the last century -- it is not as obvious as one would think.

In a related question: What is the standard deviation of life expectancy once you reach age 65 (particularly for a male)?

This is important to know for any financial modeling that you do. I couldn't find good data on this and so I had to guess this number for my Monte Carlo financial simulator.

Kramer
__________________
kramer is online now   Reply With Quote
Re: life expectancy
Old 11-23-2006, 12:08 AM   #24
Recycles dryer sheets
 
Join Date: Nov 2006
Posts: 105
Send a message via Yahoo to OkieTexan
Re: life expectancy

PBS Frontline ran a program on aging recently.

http://www.pbs.org/wgbh/pages/frontline/livingold

Have a look. Consider that in 2030, over 25% of the US population will be over 65 yrs old. Right now we care for a MIL in a nursing home. She's 82 and happy. My parents are still living on their own; but starting to have mobility issues.

This program is an eye-opener about longevity and our expectations.
__________________
OkieTexan
OkieTexan is offline   Reply With Quote
Re: life expectancy
Old 11-23-2006, 12:17 AM   #25
Thinks s/he gets paid by the post
 
Join Date: Feb 2003
Location: Mesa
Posts: 3,588
Re: life expectancy

Longevity calculators:

http://www.golio.net/My_Homepage_Files/Page9.html

Check out links at the end of Section 1.3
__________________
sgeeeee is offline   Reply With Quote
Re: life expectancy
Old 11-23-2006, 09:18 AM   #26
Recycles dryer sheets
 
Join Date: Feb 2005
Posts: 454
Re: life expectancy

Quote:
Originally Posted by kramer
I am not as optimistic on the rapid growth of life expectancy -- it looks more asymptotic to me,
But discontinuous innovation might break that curve.

For many years, improvements in TV image quality were probably asymptotic, to something like the quality of a 480i DVD on today's best TV. When HDTV came around, the curve shifted in a big way.

Or maybe max travel speeds, as railroad improvements were made over the years, then suddenly there was the airplane.
__________________
lazyday is offline   Reply With Quote
Re: life expectancy
Old 11-23-2006, 11:44 AM   #27
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,717
Send a message via Skype™ to kcowan
Re: life expectancy

Quote:
Originally Posted by kramer
...In a related question: What is the standard deviation of life expectancy once you reach age 65 (particularly for a male)?

This is important to know for any financial modeling that you do. I couldn't find good data on this and so I had to guess this number for my Monte Carlo financial simulator.

Kramer
I know that much retirement planning involves guessing how long we might live. Most actuarial tools tend to lump everyone together into a median age regardless of lifestyle difference.

The best one that I have found so far is from Wharton, because it considers many of the same lifestyle factors that insurance companies include. I also like it because it gives the lower and upper quartiles for a range of projected lifetimes.

I am interested in your reactions to this tool. And especially the spreads to lower and upper quartiles. It caused me to be more conservative regarding how long my money needs to last.

(Now if I could just get the upper decile! Here is the long form of the hotlink above:
http://gosset.wharton.upenn.edu/~fos.../CalcForm.html)
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Re: life expectancy
Old 11-23-2006, 12:08 PM   #28
 
Posts: n/a
Re: life expectancy

Took the Quiz and I came out to age 88.5

What was interesting to me is that if I became a 'conditioning exerciser' instead of just the moderate one that I checked, I would only live 6 months longer. So If I did this over a period of 30 years, I would probably have to spend 2 years exercising to live about 6 months longer - No thanks! - Back to the couch!
__________________
  Reply With Quote
Re: life expectancy
Old 11-23-2006, 01:06 PM   #29
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Re: life expectancy

Quote:
Originally Posted by OkieTexan
PBS Frontline ran a program on aging recently.
http://www.pbs.org/wgbh/pages/frontline/livingold
Have a look. Consider that in 2030, over 25% of the US population will be over 65 yrs old. Right now we care for a MIL in a nursing home. She's 82 and happy. My parents are still living on their own; but starting to have mobility issues.
This program is an eye-opener about longevity and our expectations.
Spouse saw that tape last night-- at bedtime she was still shaking and muttering "Just shoot me!"

I think Frontline went for max pathos & drama. Having discounted that, I also think that a lot of the people profiled have all but given up-- "It's in God's hands now" seemed to be the prevailing attitude. While I can understand that rationale, I'm still in the camp where God expects a little personal effort.

I'm not so sure that 78 million Boomers will feel that the decision is beyond their control, assuming that they're not still chained to their cubicles supplementing their Social Security and their Starbucks lifestyles. I think most of us are in denial fighting all the way, either into an early grave (misconduct not in the line of duty) or by expecting technology & healthy lifestyles to boost us to 11-12 decades.

And in the next couple decades voluntary euthanasia will become an innocuous personal choice, not a pitched legal battle. "Would you like CO2 or Oxycontin with that healthcare directive?"
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: life expectancy
Old 11-23-2006, 04:22 PM   #30
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
kcowan's Avatar
 
Join Date: Jul 2006
Location: Pacific latitude 20/49
Posts: 5,717
Send a message via Skype™ to kcowan
Re: life expectancy

Quote:
Originally Posted by Cut-Throat
Took the Quiz and I came out to age 88.5

What was interesting to me is that if I became a 'conditioning exerciser' instead of just the moderate one that I checked, I would only live 6 months longer. So If I did this over a period of 30 years, I would probably have to spend 2 years exercising to live about 6 months longer - No thanks! - Back to the couch!
I think the thing about exercise is that improves the quality of life as we go - fewer aches and pains. And if you suddenly lift something heavy, you might damage something. But as for living longer, no it seems only to influence living better.

I did some curve fitting to the bell curve (normal distribution) and came up with a std. deviation of .48 so that you can estimate your 10%ile and 90%ile as follows:
where LE = Life Expectancy
90%ile=LE+1.902*(75%ile-LE)
10%ile=LE+1.902*(25%ile-LE)

The spread is much broader than I would have guessed. So for me there is a 10% chance I might last until 115 if I outlive 90% of the comparable population! Looks like Smuckers is going to be busy with birthday greetings! Plus I need to rethink the risk in the SWR.
__________________
For the fun of it...Keith
kcowan is offline   Reply With Quote
Re: life expectancy
Old 11-23-2006, 05:52 PM   #31
Moderator Emeritus
Nords's Avatar
 
Join Date: Dec 2002
Location: Oahu
Posts: 26,617
Re: life expectancy

Quote:
Originally Posted by Cut-Throat
What was interesting to me is that if I became a 'conditioning exerciser' instead of just the moderate one that I checked, I would only live 6 months longer. So If I did this over a period of 30 years, I would probably have to spend 2 years exercising to live about 6 months longer - No thanks! - Back to the couch!
What kcowan said.

Now that my knees no longer swell up at the slightest provocation I've started morning stretching. I used to regard it as a colossal pain in the neck because it was much easier to stumble downstairs, plop in front of the computer, and see what was happening in the world.

After just two weeks of just 15 minutes each morning I can do full squats again and I've even been honing my tae kwon do forms for another 10-15 minutes. I'd call that a huge quality-of-life improvement, and I'll spend a lot less $$ getting to that black belt too.

I wonder how many of those Frontline complaints could have been avoided by a few years' daily stretching in their 50s & 60s.
__________________
*
*

The book written on E-R.org, "The Military Guide to Financial Independence and Retirement", on sale now! For more info see "About Me" in my profile.
I don't spend much time here anymore, so please send me a PM. Thanks.
Nords is offline   Reply With Quote
Re: life expectancy
Old 11-23-2006, 06:00 PM   #32
 
Posts: n/a
Re: life expectancy

Quote:
Originally Posted by Nords
What kcowan said.

Now that my knees no longer swell up at the slightest provocation I've started morning stretching. I used to regard it as a colossal pain in the neck because it was much easier to stumble downstairs, plop in front of the computer, and see what was happening in the world.

After just two weeks of just 15 minutes each morning I can do full squats again and I've even been honing my tae kwon do forms for another 10-15 minutes. I'd call that a huge quality-of-life improvement, and I'll spend a lot less $$ getting to that black belt too.

I wonder how many of those Frontline complaints could have been avoided by a few years' daily stretching in their 50s & 60s.
I have no aches and pains either. The point was moderation. I was talking about the minimal advantage from moderate to high exercise rates. Again Balance! - We seem to be an all or nothing society here! :
__________________
  Reply With Quote
Re: life expectancy
Old 11-23-2006, 07:48 PM   #33
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
audreyh1's Avatar
 
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 16,465
Re: life expectancy

Quote:
Originally Posted by kcowan
I think the thing about exercise is that improves the quality of life as we go - fewer aches and pains. And if you suddenly lift something heavy, you might damage something. But as for living longer, no it seems only to influence living better.
That's ultimately why I exercise! But I think moderate exercise should be sufficient.

Three years ago I started learning yoga, and part of it was that I figured it would be one of the more important skills/practises as I got older. Maintaining balance, flexibility, and muscular strength has got to go a long way to keeping quality of life good. I still consider it moderate rather than conditioning.

And then there's the bit about 3 hours of moderate aerobic exercise per week increasing brain size in older people - WOW!

Audrey
__________________
Well, I thought I was retired. But it seems that now I'm working as a travel agent instead!
audreyh1 is online now   Reply With Quote
Re: life expectancy
Old 11-24-2006, 04:37 AM   #34
Dryer sheet aficionado
 
Join Date: Nov 2006
Posts: 45
Send a message via MSN to JJac
Re: life expectancy

Quote:
Originally Posted by HaHa
I think the whole concept of life-cycle asset liquidation as currently practiced and promoted by retirement calculators and "financial planners" is seriously flawed.

I've always been interested in money and paid attention to how people made their livings, and I will say that of all the people that I knew about-- grandparents, parents, aunts, uncles, etc- nobody voluntarily liquidated their savings in a planned way.
Before I heard of the FIREcalc, I had this same perspective. I have also always been interested in money, although all of my grandparents, parents, etc... didn't have any savings so there was nothing to liquidate :P

But the idea of eating into the principal at any point was alien to me. To determine my safe withdrawal rate, I built a model with the following assumptions:
- annual inflation of 3%
- annual 5.63% return on equity (the going rate on CDs according to Bankrate)
- interest would only be earned on the final value from the previous year (no partial year interest)
- spending grew only with inflation
- health insurance increased at 8% a year
- Principal could not decline until age 100
- All growth would be taxable annually (invested only in taxable bonds) except the funds in an IRA

I figured this was about as conservative as I could get, and I didn't want to be 90 years old and run out of money. I wouldn't actually invest this way, but I figured I wouldn't do worse than this. Of course, inflation and interest rates would change, but I figured as long as interest rates were 2.63% greater than inflation that my model was close enough.

The key point though is that I wanted to insure that I would live only off of the interest until age 100. This conservative investment approach allowed me about a 2.3% withdrawal rate at 35. With this 2.3%, I need to pay health insurance, taxes, and cost of living. (The swr grew to 3% at age 70 as medical insurance costs grew. At age 100, it reached 6% and thus my withdrawal the following year would start to eat principal.) I considered age 100 to be the end of the road.

In summary, I was surprised that the withdrawal rate proposed by FIREcalc was as high as 4%.
To be completely "safe" I want something more, and that entails keeping the principal sound.

So even after hearing of FIREcalc, I stand by my original viewpoint. Although it is an interesting way to validate assumptions. I figure if I plan for the worse and the original principal goes up in a big way, then that is party money Even a 0.1% change in interest rate delays eating principal for 13 years.


__________________
JJac is offline   Reply With Quote
Re: life expectancy
Old 11-24-2006, 08:10 AM   #35
 
Posts: n/a
Re: life expectancy

Quote:
So even after hearing of FIREcalc, I stand by my original viewpoint. Although it is an interesting way to validate assumptions. I figure if I plan for the worse and the original principal goes up in a big way, then that is party money Grin Even a 0.1% change in interest rate delays eating principal for 13 years.
Of course the big problem with line of reasoning is that by the time you realize it's 'party money' you'll be far too old to party! - Don't save Sex for your old age!

The people that ran out of money age age 90, probably ran out of money at age 55. No one wakes up at age 90 and runs out of money. The signs are there 30 years in advance of that.
__________________
  Reply With Quote
Re: life expectancy
Old 11-24-2006, 08:12 AM   #36
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,642
Re: life expectancy

Quote:
Originally Posted by kcowan
I know that much retirement planning involves guessing how long we might live. Most actuarial tools tend to lump everyone together into a median age regardless of lifestyle difference.

The best one that I have found so far is from Wharton, because it considers many of the same lifestyle factors that insurance companies include. I also like it because it gives the lower and upper quartiles for a range of projected lifetimes.

I am interested in your reactions to this tool. And especially the spreads to lower and upper quartiles. It caused me to be more conservative regarding how long my money needs to last.
I think it is a bad idea to plan withdrawal rates that allow depletion of the portfolio over an estimated likely lifetime. Improving the estimate with a bunch of health related data merely amplifies the illusion of safety. We really need to plan on the longest potential lifetime because we may be surprised by beating the odds. If we believe Ray Kursweill could be right, that potential lifetime needs to effectively be perpetuity.
__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Re: life expectancy
Old 11-24-2006, 08:45 AM   #37
Dryer sheet aficionado
 
Join Date: Nov 2006
Posts: 45
Send a message via MSN to JJac
Re: life expectancy

Quote:
Originally Posted by Cut-Throat
Don't save Sex for your old age!
If anything, the amount of sex I have now is likely to give me a fatal heart attack sooner :P

Of course, I also don't want to run out of money at age 55. I get your point though, and it is making me do some self-reflection. I'm incredibly anal so it takes time
__________________
JJac is offline   Reply With Quote
Re: life expectancy
Old 11-24-2006, 09:04 AM   #38
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
youbet's Avatar
 
Join Date: Mar 2005
Location: Chicago
Posts: 9,965
Re: life expectancy

Quote:
Originally Posted by donheff
I think it is a bad idea to plan withdrawal rates that allow depletion of the portfolio over an estimated likely lifetime.
Don, does this mean you don't accept Firecalc's testing? Firecalc considers any year you don't run out of money a "success."

Or are you saying that you plug a large number into the number of years of retirement slot?
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
youbet is offline   Reply With Quote
Re: life expectancy
Old 11-24-2006, 09:31 AM   #39
Thinks s/he gets paid by the post
 
Join Date: Feb 2003
Location: Mesa
Posts: 3,588
Re: life expectancy

Quote:
Originally Posted by youbet
Don, does this mean you don't accept Firecalc's testing? Firecalc considers any year you don't run out of money a "success."

Or are you saying that you plug a large number into the number of years of retirement slot?
You can use FIRECalc to calculate a SWR required to maintain a portfolio balance. Simple enter a 1 time withdrawal equal to the original portfolio value in the final year of the simulation. For a 30 year portfolio (50/50 stock/bond allocation) the safe withdrawal rate falls to about 2.75% if you want to satisfy worst historical case rate to maintain principle.
__________________
sgeeeee is offline   Reply With Quote
Re: life expectancy
Old 11-24-2006, 10:02 AM   #40
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
donheff's Avatar
 
Join Date: Feb 2006
Location: Washington, DC
Posts: 8,642
Re: life expectancy

Quote:
Originally Posted by youbet
Don, does this mean you don't accept Firecalc's testing? Firecalc considers any year you don't run out of money a "success."

Or are you saying that you plug a large number into the number of years of retirement slot?
Yes, I do the later. What I was suggesting is that it doesn't make sense to calculate your odds of a long life and then plan your withdrawals based on the assumption that you will die at the average (or shortly after) for your type. For example, my father-in-law's three brothers all died in their early 60s from heart attacks. My FIL suffers some of their problem and had by-pass surgery. He did not live frugally because he figured he would be dead before he was 70. He is now 75 and doing fine except for the fact that he is low on money. We had to help him set up a reverse mortgage to supplement SS so he can continue to live in his condo. He beat the odds but didn't plan on it.
__________________

__________________
Every man is, or hopes to be, an Idler. -- Samuel Johnson
donheff is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


Similar Threads
Thread Thread Starter Forum Replies Last Post
What to do when you can't get life insurance? LRAO FIRE and Money 8 09-21-2006 11:10 AM
term life recommendations Rich_by_the_Bay FIRE and Money 9 08-24-2006 09:50 AM
Life insurance change ferco Other topics 6 02-14-2006 12:09 PM
What to do with Met Life Ins. Policy Adventuregirl FIRE and Money 6 02-04-2006 06:50 AM
U.S. Life Expectancy Hits All-Time High MJ FIRE and Money 1 12-08-2005 03:37 PM

 

 
All times are GMT -6. The time now is 09:15 AM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.