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Old 05-26-2015, 11:24 AM   #41
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also, RP2014 will continue to get "better" (i.e. LE at age 62 will get longer) as we age since it uses a two dimensional projection scale
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Old 05-26-2015, 11:31 AM   #42
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My mother's parents lived only to 58 and 63. She is 78, and her doctor says that barring accident or unforeseen illness, there's no reason she couldn't live to 90 or beyond.

Why plan for it? Because it would be truly miserable to be in my 90s or 100s without enough money to live in a safe place, eat properly, keep heat and A/C to a comfortable level, and pay someone to do things I can no longer do.
Exactly.

This is why obsessing over the numbers on the table is not particularly useful. As in any investing it is a matter of risk tolerance. The mortality tables along with your own family history and individual health status is just a starting point. After that it is totally subjective as to how far out you WANT to plan your financial status. Some may want to plan for the possibility they will be the outlier that lives to be a 100. Others may plan to spend now and assume they won't live much beyond the mortality forecast. It's really up to you. The differences in various actuarial tables is a minor factor relative to your own particular needs and wants.
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Old 05-26-2015, 12:08 PM   #43
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also, RP2014 will continue to get "better" (i.e. LE at age 62 will get longer) as we age since it uses a two dimensional projection scale
I'm not sure what you mean here.

My cohort number is for people who are 62 in 2015, and then uses the table's projection factors (MP-2014) for future years.

Are you referring to the cohort that will be 62 in 2025 as "better"?
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Old 05-26-2015, 12:20 PM   #44
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Are you referring to the cohort that will be 62 in 2025 as "better"?
Yes.

The projection scale MP2014 uses both a current year and year of birth.

RP2000, however, just uses the current year (scale AA or scale BB) to project the mortality rates from 2000.
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Old 05-26-2015, 12:49 PM   #45
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Or you could do this simple test to project your longevity The Stand-Sit Test That Predicts Longevity | Prevention
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Old 05-26-2015, 12:51 PM   #46
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The point I was trying to make is that if you are 60 today (let's say) and your parents died in mid-80's (let say) then to plan your current spending on a glide path to 100 or 105 is incredibly optimistic to the point of being nearly ridiculous.
Well, if your parents died 20 years ago, there's been quite a bit of medical progress since then, and there will be a lot more in the next 20 years (when you'll reach 80.

But, medical progress aside, if both of your parents died in their mid-80s, they lived more than a decade beyond the average for their time--they were long-lived. For the >average< person who is 62 right now (i.e. no exceptionally long-lived parents), there is a 10% chance that they'll live to be 93 to 97 years old. (per the OP). Given that, and that both of your own parents lived about 10 years longer than average, I do not think it is "incredibly optimistic" for such a person to plan for the potential for reaching 100 or 105.

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Sure you can plan for it, but why?
Because 1) it won't be very unlikely for some people and 2) being old and broke is worse than just being old.
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Old 05-26-2015, 01:15 PM   #47
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Yes.

The projection scale MP2014 uses both a current year and year of birth.

RP2000, however, just uses the current year (scale AA or scale BB) to project the mortality rates from 2000.
We're drifting off into techie stuff here...
But, a one-dimensional scale will also say that people turning 62 ten years from now will have longer life expectancies than people turning 62 this year.
The IAM-2012 table uses a one-dimension improvement scale. If I change the "year turns 62" from 2015 to 2025, I add about one year to the 50/50 survival.

The second dimension allows for changing rates of improvement.
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Old 05-26-2015, 01:19 PM   #48
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I like the mindset that imoldernu and W2R suggested... Plan to a certain age - but periodically relook at things.

And like RunningBum - my home is not included in my "plan A" retirement plans - but offers a valuable plan B or C - to sell and downsize, or sell and move to assisted living. That's one advantage to having a paid for home in an expensive area... it is such a significant chunk of my net worth (but not of my retirement assets) that it's a pretty darn good safety net against running out of money and living in a van down by the river.
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Old 05-26-2015, 01:19 PM   #49
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We're drifting off into techie stuff here...

yes that's true - with 2D each YOB cohort has it's own projection scale


agreed, we'd better get back on topic before one of us (I, probably) gets another nastygram from a mod

the joint life expectancy should be an eye-opener to most posters, although I suspect most posters have a very conservative "plan" in place already
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Old 05-26-2015, 01:53 PM   #50
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I think LE data will continue to "improve" - as in we'll average living longer - in the future and a big part of that may be the fact that smoking has fallen out of favor. I suspect my dad's pancreatic cancer that hit at age 78 was caused by his pack-plus-a-day habit for two decades... doctors keep telling him even now at 81 that he's in remarkably good health "except for the cancer treatment effects."

Personally, I plan for around 90. His dad made it to mid-80s. I'd guess my dad will make it to mid-80s. Mom's dad made it to mid-80s... but I'm not planning to hit 0 at 90 (a pension and perhaps deferring SS will make that largely irrelevant anyway!).
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Old 05-26-2015, 02:03 PM   #51
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Some quick thoughts:

(1) Surely some researcher has come up with a quantile regression model that gives better results than period/cohort table conditioned only on sex.
There are great calculators out there that take into account loads of demographic and medical information. But they're not free.
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Old 05-26-2015, 02:06 PM   #52
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There are great calculators out there that take into account loads of demographic and medical information. But they're not free.
you mean like life underwriting software?
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Old 05-26-2015, 06:33 PM   #53
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Yep.
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Old 05-26-2015, 07:20 PM   #54
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you mean like life underwriting software?
Is it possible to get access to something like this as a non-employee?

I see a lot of free calculators on the web, but I think they are probably garbage, not actually based on real data / statistical model, and likely ask way more questions than needed to collect your data.
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Old 05-26-2015, 10:02 PM   #55
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There are great calculators out there that take into account loads of demographic and medical information. But they're not free.
I gotta think that these tools are very useful in accurately predicting mortality over a large number of cases. But isn't the variance in any one particular case (the one I care about--ME!) fairly high? How precise is this likely to me? How precise would we want it to be? ("Ask not for whom the bell tolls . . . .")
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Old 05-26-2015, 10:28 PM   #56
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This is likely just part of the general obsessiveness found here.

As to its practical value, maybe it is worth 4 hours early in ones retirement planning to understand that life expectancy at birth is not what you are interested in, unless you are literally going to be born again. Also what is the relevant group you belong in-ie life insurance buyers or annuity buyers.

Maybe a few very general principles, like you should be much more interested in annuity tables than life tables for insurance buyers. Glance in the mirror to get a fix on your sex. If you are a member of a couple use the relevant factor for the last to die.

Beyond this, one's own health very broadly assessed, and maybe a few lifestyle factors, like do you smoke a pack a day and drink until you pass out every night? Finer than this needn't concern us, because we don't want to run out of money, but we really do not care if we don't zero out the bank account on the date of our demise.

Overall we will do more for our security by working an extra year than anything we can do by becoming amateur actuaries.


Ha
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Old 05-26-2015, 11:09 PM   #57
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I don't think it's a black swan event for one of two people in their 60s to make it to 100.
+1. It has happened in my family. I'd be dumb not to plan to age 100+. If getting a programming job at age 55 is hard for many middle aged people, I think 90 would be super tough. I am okay with leaving money to charity. My goal is not to spend the portfolio to zero. I don't want to have to worry about running out of money in my old age.
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Old 05-27-2015, 09:08 AM   #58
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A somewhat related article from 538:

Why The Oldest Person In The World Keeps Dying | FiveThirtyEight

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I found that more people than ever are clustering at the outer edge of human aging and that the tenure of the world’s oldest living person isn’t as long as it used to be. Better record-keeping and longer lifespans have helped lead to quite a crowd.
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Supercentenarians — people who have lived past their 110th birthday — generally come from a heartier stock than most people. They tend to have few age-related health issues and are much physically and mentally sharper than their peers during their 80s and 90s. Weaver, for example, didn’t move into the rehabilitation home until she was 109. As we enter an age with less war and infection and fewer accidents, more and more people with these superior aging genes have been able to make it to a point in time when they can show them off. It’s getting crowded at the top.
Wow staying out of a nursing home until 109!
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Old 05-27-2015, 09:33 AM   #59
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I believe that this article from The Atlantic, deserves a read. Not just from a standpoint of statistics, but some expectations of how an aging society may change the entire face of society, such as the increase in the aging population creating a different type of political landscape. A power bloc of aging voters who may influence Federal budget items such as Taxes, Social Security, Pensions, Healthcare and the many benefits that may accrue to the elderly.

What Happens When We All Live to 100? - The Atlantic

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Longer life has obvious appeal, but it entails societal risks. Politics may come to be dominated by the old, who might vote themselves ever more generous benefits for which the young must pay. Social Security and private pensions could be burdened well beyond what current actuarial tables suggest. If longer life expectancy simply leads to more years in which pensioners are disabled and demand expensive services, health-care costs may balloon as never before, while other social needs go unmet.
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Old 05-27-2015, 10:37 AM   #60
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I believe that this article from The Atlantic, deserves a read. Not just from a standpoint of statistics, but some expectations of how an aging society may change the entire face of society, such as the increase in the aging population creating a different type of political landscape. A power bloc of aging voters who may influence Federal budget items such as Taxes, Social Security, Pensions, Healthcare and the many benefits that may accrue to the elderly.

What Happens When We All Live to 100? - The Atlantic
Yes; thanks for the link. Worth the time to read and consider. Hadn't seen it before. This was not the crux of the article, but an observation that most will sigh and agree with, regardless of political leanings:

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A fair guess is that the government will do nothing about Social Security reform until a crisis strikes—and then make panicked, ill-considered moves that foresight might have avoided.
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