Your longevity is one of the most significant unknowable factors that determine how much you need for retirement, how much you can spend, how much time you have to do the things you want to do and more. Estimating your longevity using one of the best life expectancy calculators can be a good way to improve the accuracy of your retirement financial and lifestyle projections.
While life expectancy in the United States has dropped slightly, Americans are living longer than any previous generation — a lot longer.
The average life expectancy for a 65-year-old American is now 18 more years on average for men. And, women can expect to live around 20.6 more years. That means that — according to the Social Security Administration — the average 65 year old man will live until 83 and the average woman will live until almost 86. But at least half of us will live even longer — a lot longer.
And there is a twist, the longer we live, the longer we will live. A longer life begets an even longer life. While, a 65-year-old American man can expect to live to almost 83, an 85 year old man can expect to live past 90 — on average.
And further good news is that we are living healthier and more robust lives. “Old” people now feel younger and more vital. We are doing more at older ages.
There is no way around the fact that longer and healthier lives cost more money.
Let’s say your household needs $60,000 a year to live on and your Social Security income amounts to $36,000. In this scenario, you would need an additional $24,000 a year in savings to make ends meet for every extra year you live.
How long you live represents an immense factor in planning for your retirement. How much you need for retirement is hugely impacted by how long you will live. If you retire at 65 and only live till 68, you will need only a small fraction of what you will need if you were to live till 98.
Lifetime expectancy calculators use data to help assess how long you yourself are going to live. These calculators offer no guarantees of accuracy, but they might help you come up with a life expectancy that is perhaps more realistic for you.
Some of the best life expectancy calculators include:
Livingto100: This calculator is based on data from the New England Centenarian Study, the largest study in the world of people who live to 100. The Livingto100 calculator asks you almost 50 questions to determine how long you might live. The particularly nice thing about this detailed life expectancy calculator is that it gives you personalized feedback on each data point about why it is important to your longevity.
Blue Zones Vitality Compass: The Vitality Compass is the life expectancy calculator from Blue Zones. Blue Zones is a publisher dedicated to uncovering the best strategies for longevity based on places in the world where higher percentages of people enjoy longer lives.
Blueprint Income: The Blueprint Income life expectancy calculator has a great, easy to use interface and interesting outputs.
It was developed by Dean Foster, the William H. Lawrence Professor at the University of Pennsylvania’s Wharton School of Business. This calculator uses a detailed statistical analysis of NIH-AARP data and is sometimes called the Wharton Life Expectancy Calculator.
LifeSpan Calculator from Northwestern Mutual: Every time you answer one of the 14 questions on this easy to use life expectancy calculator, your estimated longevity is updated. This is great feedback for seeing how lifestyle choices and health factors impact how long you will live.
John Hancock Life Expectancy Calculator: This calculator includes questions about your blood pressure and cholesterol, making it seem extra accurate.
Big Life: Big Life asks specifics about different kinds of physical activity as well as collecting details about how much fruit and vegetables you eat each week — in addition to the normal questions.
Medical Life Expectancy Calculators: If you have a specific disease or condition, you might want to use a life expectancy calculator specific to your medical situation. While highly relevant, most of these are actually intended to be used by doctors. However, if applicable, you might try one of the following:
NOTE: All of the above calculators are based on real data. However, it is important to state again that these calculators are not 100 percent accurate. They use averages and historical data to make projections. But remember, you are completely unique and there is no predicting the future.
Retirement planning can feel futile when one of the biggest factors — your longevity — is completely unknowable. Here are a few strategies for creating a plan that feels rational:
Most retirement calculators and even many retirement financial advisors use simple averages when calculating your retirement financial needs.
You need to understand this and make sure you are okay with the calculations.
The NewRetirement Retirement Planner allows you to enter a goal age for you (and your spouse if applicable). So, with this tool you can control how long you want to be able to fund your retirement.
You may want to create different retirement plans based on an optimistic life expectancy and a pessimistic life expectancy. For example, you might have a solid financial plan that takes you from age 65 until you are 80 years old. And, your back up plan might be to use home equity or some other source of wealth thereafter.
It is important that you assess and refine your retirement plans regularly. Quarterly is recommended, but you should check in anytime your finances and health change. Retirement planning is not something you do once and forget. It should be a part of a routine.
Most people approaching retirement are focused on figuring out how much savings they need.
However, you might be better off figuring out how much income you need every month and then taking steps to guarantee that income for your lifetime.
The two most popular sources of guaranteed lifetime income for retirement are:
- Social Security: Social Security is income that is guaranteed for life — no matter how long you live. Because it lasts for as long as you do, it may be worth delaying the start of Social Security to maximize your monthly benefit.
- Lifetime Annuities: Lifetime annuities can be another source of guaranteed lifetime income. If you can afford a lifetime annuity, they can enable you to stop worrying about running out of money before you die.
This article gives you a variety of options for dealing with your life expectancy. No matter how you choose to plan, a good retirement calculator can help you make better choices.
The NewRetirement Planner has been named a best retirement calculator by the American Association of Individual Investors (AAII), Forbes Magazine, The Center for Retirement Research at Boston College, MoneyBoss, CanIRetireyet and many more.
The tool is ideal for planning because it covers a comprehensive set of information relevant to retirement and lets you customize everything — including your own life expectancy.