Longevity risk is not what you may think

[Chuckanut]

From the March 6 WSJ p. R11

The Right Way to Look at Longevity

As it turns out it hasn't been an increase in the maximum age attained that is driving recent increases in life expectancy, but rather, an increase in the number of people living closer to their maximum life expectancy.

More of us are growing older instead of living longer.

It seems that if one runs a retirement projection based upon a long life (say the mid 90's), one is probably OK. But, those who have assumed they may not live much past 75 may be in for a rude awakening when they run out of money 10-15 years before "the end".

If I can find the link, I will post it. But, it may be behind a paywall.

 

[Danmar]

From the March 6 WSJ p. R11

The Right Way to Look at Longevity

More of us are growing older instead of living longer.

It seems that if one runs a retirement projection based upon a long life (say the mid 90's), one is probably OK. But, those who have assumed they may not live much past 75 may be in for a rude awakening when they run out of money 10-15 years before "the end".

If I can find the link, I will post it. But, it may be behind a paywall.

Yes, I saw a good visualization of this effect in the progression of life expectancy graphs. Often referred to as a fattening or thickening of the life expectancy graph, ie people are dying later but the max life expectancy not increasing. More people dying in their 90's than before.

 

[Zona]

DH's great-uncle just passed away at the ripe old age of 103. DH's grandfather and grandmother lived to 96 and 88, respectively. So we are planning to age 95+ for him.

Whereas I come from a family of heavy drinkers and long-time smokers, so based on that small sample...maybe 80 for me? But I don't smoke and drink moderately; so really I've got no idea if my genes have what it takes to go to 95 or more. I'm an optimist so I still plan for it in the Lifetime planner though.

There are no guarantees, but the goal is to stay healthy & do our best to ensure the bulk of those are quality, active years with a sharp mind.

 

[Danmar]

The other thing to keep in mind is that there isn't as much correlation of age at death between family members as you might think. I read somewhere that only about 1/3 of your life expectancy can be attributed to your ancestors?

 

[DrRoy]

It still boils down to - you might be around longer than you think.

 

[nativenewenglander]

My mom died at 91 and dad died at 86. They both lived the longest in their families. I'm hoping to have their genes, but of course there are no guarantees.

 

[Luck_Club]

OK..So we live to be 90+ What all these articles fail to understand or articulate to the reader is that your money needs decline after a certain point.

It is my belief that the most active spending is going to take place before 75. Most of the relatives and people I have known have greatly reduced their spending by that point in life. The energy levels are typically zapped, arthritis and other ailments of aging have started taking their toll. If you haven't already traveled and seen all that you want to at this point, you probably never will. Your desire to redo the bath or kitchen is probably gone as well. So your needs are likely to be for only basic necessities of life.

So your need for money has diminished to tv dinners and cable bills.

 

[nativenewenglander]

OK..So we live to be 90+ What all these articles fail to understand or articulate to the reader is that your money needs decline after a certain point.

It is my belief that the most active spending is going to take place before 75. Most of the relatives and people I have known have greatly reduced their spending by that point in life. The energy levels are typically zapped, arthritis and other ailments of aging have started taking their toll. If you haven't already traveled and seen all that you want to at this point, you probably never will. Your desire to redo the bath or kitchen is probably gone as well. So your needs are likely to be for only basic necessities of life.

So your need for money has diminished to tv dinners and cable bills.

This is my feelings in a nutshell. Someone else said taking your SS means you can spend that money now on travel or whatever. Once you reach 70 there are increasing chances of ailments creeping in and the need or want of spending will drop considerably. By the time my mom was 80 and dad was 71 they basically were done traveling except going to the lake house to hangout with friends. At 76 my dad was a full time caregiver to my mother. Today people are more active and many are taking better care of themselves, so will this make it so people are traveling enjoying life longer?

 

[Souschef]

OK..So we live to be 90+ What all these articles fail to understand or articulate to the reader is that your money needs decline after a certain point.

It is my belief that the most active spending is going to take place before 75. Most of the relatives and people I have known have greatly reduced their spending by that point in life. The energy levels are typically zapped, arthritis and other ailments of aging have started taking their toll. If you haven't already traveled and seen all that you want to at this point, you probably never will. Your desire to redo the bath or kitchen is probably gone as well. So your needs are likely to be for only basic necessities of life.

So your need for money has diminished to tv dinners and cable bills.

+1! When we got married 10 years ago, we traveled with a vengeance. As we aged and lost some mobility, it became more difficult to take organized tours.
We did 3 trips in 2015, 2 in 2016, and we only have one laid back Hawaiian trip scheduled for this year. My DW has a bad knee, and has finally allowed that she will use a wheelchair at the airport. When we toured Butchart Gardens in Victoria, I rented a scooter for her. She was reluctant to use it, but finally allowed that she would not have seen one tenth of the gardens without it.
We have also decided that our bodies cannot take 10 hour transatlantic flights, even in business class, so our European traveling is over.
There is still a lot to see in the US, and it can be done at our pace.

 

[kcowan]

OK..So we live to be 90+ What all these articles fail to understand or articulate to the reader is that your money needs decline after a certain point.

It is my belief that the most active spending is going to take place before 75. Most of the relatives and people I have known have greatly reduced their spending by that point in life. The energy levels are typically zapped, arthritis and other ailments of aging have started taking their toll. If you haven't already traveled and seen all that you want to at this point, you probably never will. Your desire to redo the bath or kitchen is probably gone as well. So your needs are likely to be for only basic necessities of life.

So your need for money has diminished to tv dinners and cable bills.

I wonder if it relates to your lifestyle before your dotage? We know people here in PV who are still going strong at 88?

 

[Nemo2]

I'm scheduled to be 75 in six months....ramping up the travel a tad.....I'll never see everything I want to see, but I'll give it a shot.

(Couple years ago we met an Australian woman pushing her grandmother in a wheelchair in Sicily......helped them over a couple curbs.....they were off another cruise ship...Granny had lots she still wanted to see.

Also, in Lisboa, we once sat in a city square and watched a cruise ship shuttle offload a bunch of 'older' people in wheelchairs, with walkers, canes, etc..........limited mobility combined with immeasurable curiosity.)

 

[Teacher Terry]

My Mom traveled a lot until age 84. Then she rarely did. We see a lot of people in bad shape on cruises which is probably why they take them because physically it is easier.

 

[Fedup]

My in-law didn't travel after 63 and 70 for MIL and FIL. No ailment until late 80s, but they did see the world in their lifetime due to FIL's career.

 

[gerntz]

OK..So we live to be 90+ What all these articles fail to understand or articulate to the reader is that your money needs decline after a certain point.

I disagree that this is true. People spend more on medical care & potential assisted living help in the last 2-3 years than any other time. It may not be out of pocket as people transfer their costs to government, but the greater "you" does spend more at the end on average.

 

[harley]

Having made it out of my 20s alive, I must assume I am supposed to live forever. Therefore I planned my FIRE out to 100 or so. However, if DW goes before I do, I will resume my dissolute ways and probably join her soon after.

 

[Fedup]

One of the many reasons why I make sure my husband stays healthy. Truth be told I might die a few years after him, like his mom after his dad was gone. She has the same age gap as my husband and I, and I always thought she was much healthier than his dad. Maybe that's self preservation in disguise.

 

[Teacher Terry]

More people are dying at home using hospice which saves a bunch of $. Both my parents died a week later after ending up in a home or a hospice that had a facility. Neither spent much $ on end of life care. Both had a DNR on file.

 

[youbet]

What all these articles fail to understand or articulate to the reader is that your money needs decline after a certain point.

It is my belief that the most active spending is going to take place before 75. Most of the relatives and people I have known have greatly reduced their spending by that point in life. The energy levels are typically zapped, arthritis and other ailments of aging have started taking their toll. If you haven't already traveled and seen all that you want to at this point, you probably never will. Your desire to redo the bath or kitchen is probably gone as well. So your needs are likely to be for only basic necessities of life.

So your need for money has diminished to tv dinners and cable bills.

This is dangerous thinking to generalize.

Many folks were able to FIRE because they were committed to living frugally. Having their time 100% at their own discretion was worth living with outdated kitchens and baths (but well maintained and immaculate), aging furniture and cars (again, well maintained) and modest travel (camping, exchanging visits with relatives and friends in other parts of the country, etc.). Spending on remodeling, travel, new cars, etc., hasn't been a part of their plans and therefore can't decrease as they age. But the costs of growing older such as higher health care costs, a handyman to do routine chores you used to do yourself, a cleaning service, mandatory remodeling to accommodate elderly needs, etc., can add to expenses.

At our house, we're planning on costs remaining stable as we age and, so far, it's working out that way. At 70, I've already hired a lawn service, started using hired help for some previously routine chores (painting, heavy cleaning, window washing, etc.) and found a trustworthy mechanic for automobile work I used to easily do myself.

I tell ya, as physical agility and energy decline, it's really, really good to be able to afford to simply have someone else do it. So, bottom line, I wouldn't plan FIRE based on expenses declining as you age in every circumstance.

 

[kcowan]

I tell ya, as physical agility and energy decline, it's really, really good to be able to afford to simply have someone else do it. So, bottom line, I wouldn't plan FIRE based on expenses declining as you age in every circumstance.

And when your retire to Mexico, you can hire help for so little that the job gets done for less than the cost of a trip to Home Depot. Average wage is 80 pesos a day and really skilled workers get 160 to 200. Not only does it make sense but you are helping the local economy.

Of course, once you establish the lower baseline, the slope is comparable but your stash is much more. On our case, the baseline dropped by 40% so our plan just extended.

 

[kcowan]

The other thing to keep in mind is that there isn't as much correlation of age at death between family members as you might think. I read somewhere that only about 1/3 of your life expectancy can be attributed to your ancestors?

Tell me about it. My uncle and my cousin died at 52. Mom at 57. Bro at 69. Kissin cousin at 68. Yet another cousin at 96. Dad at 95. As a betting man, all bets are off! Two were COPD so I am treating that well.

 

[braumeister]

The other thing to keep in mind is that there isn't as much correlation of age at death between family members as you might think. I read somewhere that only about 1/3 of your life expectancy can be attributed to your ancestors?

As a betting man, all bets are off!

A very important point. Since none of us knows when we will go (apart from the random uncle who was told the exact date of his death by the judge), we seem to be driven to manufacture anecdotal evidence from our family history. It may be comforting sometimes, but it's important to remember that it's only anecdotal.

Eat, drink and be merry, for tomorrow we die.
-- as often [mis]quoted from the bible

 

[Luck_Club]

A very important point. Since none of us knows when we will go (apart from the random uncle who was told the exact date of his death by the judge), we seem to be driven to manufacture anecdotal evidence from our family history.

 

[Koolau]

As mentioned elsewhere, when I retired at 58, a 30 year time-line seemed appropriate. Now, near 70, I'm not so sure.

Was looking at an article on nursing facility costs around the US. The spread from state to state was rather more than I would have guessed. I thought HI would be the highest, but it wasn't - by quite a margin. IIRC, Alaska was worst and HI was only in top 1/3. In any case, since both parents ended their days in such facilities (and spent their last dime there - but came out even!) I'm still kind of penny pinching when I should probably loosen the purse strings a bit. Not so worried about living too long as I am am about needing a LOT more money at the end. YMMV

 

[razztazz]

I'm still kind of penny pinching when I should probably loosen the purse strings a bit. Not so worried about living too long as I am am about needing a LOT more money at the end. YMMV

That's about where I am. My plan is to be able to fund a slot at a decent nursing home for 2 years at retail rates. If I'm tapped out at some point I probably won't be in any condition to care much about it. But even though I know at this point I can start spending more on "worldly pursuits and carnal pleasures" I still need to keep the cookie jar loaded for the End Game

 

[Hermit]

I would much rather eat a TV dinner than get on any airplane to anywhere! I guess I will be fine as I grow older.