life expectancy

[JJac]

I'm currently 32 years old and on my current trajectory, should be ready to call it quits in a year

In firecalc, I put in 40, 50, and 60 years for lifetime, and there wasn't a substantial difference in SWR

That said, the IRS thinks I'm going to live another 51.4 years. Presumably, after decoding the human genome and the billions invested in medical research every year, life expectancy should go up. Shouldn't it?

Unless I'm hit by a bus, is planning for 60 years crazy? Too conservative? Too aggressive?

What do you think?

Thanks

Jeremy

 

[Cb]

When you use the longer retirement durations in FIREcalc you're eliminating the ugly 1967 - 1968 era from the result set.

FWIW - I most often model 50+ year retirements, taking us out to the ~95% of survivorship.

Cb

 

[tryan]

Congrats on you achievment! Not many can hang it up in thier 30's.

When I ran my numbers I found that if I needed my wad to last 50 years, it'll last "forever". Esentially you're living off the growth and never touching principal. Soo, 50, 60 or 100 years ... really makes no difference.

 

[bosco]

That said, the IRS thinks I'm going to live another 51.4 years. Presumably, after decoding the human genome and the billions invested in medical research every year, life expectancy should go up. Shouldn't it?

Unless I'm hit by a bus, is planning for 60 years crazy? Too conservative? Too aggressive?

What do you think?

If I were your age, I would use 60+ years.

see

http://en.wikipedia.org/wiki/Engineered_negligible_senescence

There are credible people including Aubrey de Grey and Ray Kurzweil who believe that "escape velocity" will be reached with the next 30-50 years. In other words, aging may be a reversible medical condition, and once you can treat it faster than it occurs to you, you will essentially be on the planet until you are run over by a beer truck.

I realize that this brings a strong and often negative emotional response in many people, but that's what I would do in your shoes. The average life expectancy has gone up at an increasing rate throughout recent history. As you noticed, the difference between 40, 50, 60, or infinite, is not that long. Why not be cautious and optimistic at this point?

 

[Sheryl]

When you use the longer retirement durations in FIREcalc you're eliminating the ugly 1967 - 1968 era from the result set.

FWIW - I most often model 50+ year retirements, taking us out to the ~95% of survivorship.

Cb

I've modeled both, and made sure all possibilities are covered. I expect/hope/plan to live to 100- as my grandmother did, and medical technology SHOULD be improving... so I have run calcs with 55 year (I'm 46 now) timeline. But as Cb mentioned, that eliminates some bad years, so I've also run 30 and 40. To paraphrase, you have to survive 30 years before you can survive 50, and I don't want to be on the last dollar, or anywhere close to it, when I'm only 76!

 

[Nords]

That said, the IRS thinks I'm going to live another 51.4 years. Presumably, after decoding the human genome and the billions invested in medical research every year, life expectancy should go up. Shouldn't it?

Most of the 20th century's longevity improvements were caused by improving public health (sewers, water supplies) and reducing infant mortality. Seems pretty basic but the impact was huge. It wasn't so much that people were living longer as it was that they weren't dying young-- net effect is a longer median lifespan.

Most of this century's lifespan improvements will probably come from even more "Well, duh" initiatives like cutting down on smoking & fat-filled diets while exercising more. Again not much life extension but a lot of early-death avoidance.

True "life extension" initiatives are still in the Dark Ages with research into Alzheimer's, telomeresis, and calorie restriction. The effects have been noted and various projects are nibbling around the edges but we still haven't identified the processes, let alone come up with reliable ways of controlling them. OTOH I suspect it'll take a little less time to "solve" these problems than it took for Thomas Crapper's & Alexander Fleming's research to be implemented. (I can't think of any "clean water supply" icons right now.) In the meantime the odds of personally benefiting from sudden advances in life prolongation are improved by... living longer. It helps to still be around when the advances are made.

One interesting feature of the IRS tables is the implication that the older you are, the longer you'll live (more "Well, duh"). Add up the numbers in the two columns for "Age" and "Remaining life expectancy" and the total creeps ever higher than your current 80-something. Current statistics seem to indicate that if you can make it to 65 without serious health issues then you'll stand a great chance of making it to 85. And if you can make it to 85 without cardiac problems, influenza, or pneumonia then you'll probably go for another 20 years.

So maybe that financial plan should stretch out to age 120...

 

[Eagle43]

Current statistics seem to indicate that if you can make it to 65 without serious health issues then you'll stand a great chance of making it to 85. And if you can make it to 85 without cardiac problems, influenza, or pneumonia then you'll probably go for another 20 years.

So maybe that financial plan should stretch out to age 120...

Can I quote you on this in 40 years or so?

 

[REWahoo]

Can I quote you on this in 40 years or so?

I can't resist... Yes you may. Can you? Well, we'll see...

 

[Cut-Throat]

I always use a nice round number like 100.

With that said, I plan to have 50% of my current principle eaten away by age 90. Whether by severe inflation, A great depression or me having a good time! 8)

Excuse me Nords - Planning for age 120 has the odds for including a lottery win by age 75 in your retirement planning!

 

[TromboneAl]

Relevant to the possibility that we could let people live a lot longer:

There are 6 billion people on this planet -- how many are over 130 years old?*

IOW, eliminating aging is probably going to be difficult, since nothing has produced naturally age-resistant people.

*Answer: none that are known.

 

[Sheryl]

There are 6 billion people on this planet -- how many are over 130 years old?*

And while were on the subject of 6 billion people, we're going to have one heck of an overpopulation problem if a lot of them start living to 130.

Why not focus on curing diseases that kill young healthy folks, and let the seniors check out naturally in the 90's or so? I personally think it's a bit greedy to want to live that long, although I realize that the research could open up other areas of knowledge.

I know my grandma was good and ready to check out after 98, although it took 3 more years for nature to get the message. She was still in good health and sometimes mental condition - she just said she'd done everything she needed and wanted to do, and anytime now is fine, and please don't be sad, she had a gread life. I hope I go that way.

 

[astromeria]

Guess Social Security will have to add the option of starting to collect at 80 1/2

 

[Sheryl]

Exactly. My dad had all sorts of travel goals, but now at 79 (w/ 81 yo DW) they have decided they are done with travel. The desire to be comfy with their own food and bed overrides the desire to see new places.

 

[ESRBob]

When I ran my numbers I found that if I needed my wad to last 50 years, it'll last "forever". Esentially you're living off the growth and never touching principal. Soo, 50, 60 or 100 years ... really makes no difference.

I agree -- when you get really old you can start spending down money faster, but its hard to find a 'safe' way to slowly spend down money so that it will last 50 years. Just too many variables. Better to aim for a way to keep it intact so that it can effectively keep generating the same real withdrawal and/or real portfolio value in perpetuity.

That's what the big institutions do -- they even have a term for it -- they talk about 'intergenerational equity', meaning finding the right withdrawal rate and investing method so that today's recipients of grants are no more and no less benefited than tomorrow's or next century's beneficiaries of grants. Take too little now and the future people will get too much. Take too much now and the future people get too little.

 

[Nords]

Can I quote you on this in 40 years or so?

Yes-- and tell your spouse you'll be spending most of that quality time with her!

Excuse me Nords - Planning for age 120 has the odds for including a lottery win by age 75 in your retirement planning!

Well, I don't have it in the plan, but I suppose lottery tickets are a form of investment diversification.

Don't get me wrong-- I don't expect to live to 120 although I suspect I'll be just as curious at that age as I am now. I'm not counting on medical science or technology, either, although I'm encouraged by the Internet's recent advances in porn virtual reality. One of my (very) long-term goals is to collect more inflation-adjusted pension dollars than salary dollars. And I wouldn't mind seeing my name on my alma mater's list of 10 oldest alumni, a club which requires triple digits to join. So it's not as if I lack motivation.

But to me, outliving one's assets seems to be at least as risky a disaster as the statistical likelihood of experiencing a major fire or a serious vehicle accident or a deathly disease. We all plan for those catastrophes by carrying insurance (or by self-insuring) and that's all I'm doing by being ready to live to age 120.

Or did I miss the punchline on this comment?

 

[bosco]

There are 6 billion people on this planet -- how many are over 130 years old?*

IOW, eliminating aging is probably going to be difficult, since nothing has produced naturally age-resistant people.

*Answer: none that are known.

Did you read the link I posted or check out the work of Aubrey de Grey? Your quote is equivalent to a pre-Wright brothers person asking "how many people on the planet have flown through the sky"? (Ansewer: none that were known).

And while were on the subject of 6 billion people, we're going to have one heck of an overpopulation problem if a lot of them start living to 130.

Why not focus on curing diseases that kill young healthy folks, and let the seniors check out naturally in the 90's or so? I personally think it's a bit greedy to want to live that long, although I realize that the research could open up other areas of knowledge.

I know my grandma was good and ready to check out after 98, although it took 3 more years for nature to get the message. She was still in good health and sometimes mental condition - she just said she'd done everything she needed and wanted to do, and anytime now is fine, and please don't be sad, she had a gread life. I hope I go that way.

no question that if this technology emerges, it will cause massive demographic shifts and social changes. I doubt if that fact would be enough to prevent it although it might be enough to cause resistance.

The question is more how you would have felt if your 98 year old grandmother could undergo therapies that would make her physically and mentally 40 again. I think if this scenario were common, it would make perfect sense to pass a law that said, effectively, that your social security or other benefits depend on your life expectancy, not your chronological age. Or require people to forfeit the benefits if they received rejuvenation therapy.

First, I am not claiming to believe any of this stuff, but neither do I disbelieve. People like Ray Kurzweil are far more apt to successfully predict future technology than I am. My point is, that since there isn't much difference between an SWR that will last 40 years and one that lasts to infinitiy, (and if you RE at 50, you need to plan for at least 40 years anyway) I'm going to leave the extra 0.2 % or so on the table and hedge my bets. Worst case scenario is Oxfam or Doctors Without Borders get some money and my kids get an inheritance. I love life too much to not at least allow the possibility of it continuing at a high quality if people a lot more educated than me think it is a strong possibility.

 

[kcowan]

One interesting feature of the IRS tables is the implication that the older you are, the longer you'll live (more "Well, duh")...

When my Dad was 90, I did a life expectancy calculation and his median expectancy was 93.5. He actually made it to 95.

Mine is 89.5 but with 25%ile at 84 and 75%ile at 96. The spread is what surprised me. So I have run our plan out to 103 as a result.

And like you say that has no assumptions about breakthroughs (other than what is already in their statistical base).

 

[Eagle43]

Speaking of longevity, did you watch the Frontline program "Living Old" last night? Depressing.

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

I might have to revise that 100 projection. It was one of the most depressing things I've ever watched on TV. Since I often visit my mother in the nursing home, I can vouch for some of the awful predicaments shown on the program. One of the conclusions, if you stay in the nursing home six months or longer, there's only one way you'll be leaving.

 

[Sheryl]

This is an interesting site that calculates your "Real Age," based on various factors. The also send a weekly e-mail - I generally hate those e-newsletters but I actually find this one interesting and helpful. You can customize what they send you based on your health interests/problems.

http://tinyurl.com/yfhrko

 

[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

 

[lazyday]

on Kurzweil

People simply need to live long enough—another 15 to 30 years—to live forever.

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.

 

[Cut-Throat]

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.

 

[kramer]

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

 

[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.

 

[sgeeeee]

Longevity calculators:

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

Check out links at the end of Section 1.3