US Life Expectancy After Retirement

In retirement planning, many factors must be considered and are used as inputs to retirement calculators. The typical variables are the amount of assets you have, how much retirement income you need, your tax rate and most importantly, your estimated life expectancy. However, it is this author’s opinion that life expectancy is often mishandled in retirement planning.

The main problem occurs because individuals and even financial advisors will select an average life expectancy as a particular point. For example, often used tables are the IRS IRA minimum minimum distribution tables in IRS Publication 590. On these tables you look up your current age to find the remaining years of life expectancy (see below).  We see that if you have attained age 72, you have a remaining life expectancy of 15.5 years.

IRS Life Expectancy Publication 590 2010

Of course, the number you find is the average or median in which case we can assume 50% of the people die before that age and 50% die after. If you use that average life expectancy figure in your retirement planning, you have a 50% chance of out-living your money because you may be one of the two people who live longer than the average. Since you’d like to avoid that, let’s offer another approach.

The other approach is to supply you not with a specific point, median or average life expectancy but rather a probability distribution for your life expectancy. In planning for your retirement and how long your money must last, what you’d really like to know is the answer to the following question. Given that I am already age 72 what is the probability of me living to age 85 or 90 or 95? By knowing the probabilities of life expectancy to certain ages, you can then make a plan that includes an accepted risk for out-living your money. For example, at age 72, one has a 20% chance of living to age 92 or longer. If you find that 20% risk of out-living your money acceptable, then you would use age 92 in your retirement planning so that your plan forecasts your money to last that long.

Without such a probability distribution of life expectancy, using any single point will probably lead to a flawed retirement plan. This missed estimation of life expectancy has been the weak link in retirement planning.

Download your probability chart of life expectancy.

  • l33t hackers

    “We see that if you have attained age 72, you have a remaining life expectancy of 15.5 years.”
    I just wanted to say life expectancy should be based more on your own family. Instead of basing your own life expectancy on a countries average. But have always wondered what the country’s average. Thank you for the statistics.

  • Jason

    Most of the guy where I work won’t retire for just this reason. They don’t know how long they will live and if they will out live their money

  • Boho Clothing

    To I33t hackers: Life expectancy is the expected (in the statistical sense) number of years of life remaining at a given age.—Wikipedia

  • Thomas

    As Im reading the articles about the Retirement in US I’m getting to a such a conclusion. No matter what other will say US government is carying about the older people I’m from the one of the eauropean country’s and as I recon the retirement life in here can be really hard. So no matter what is your Life expectancy the matter is that you will live your life as proud person.

  • Furniture Myrtle Beach

    I think what we really need is more guarantee that our retirement savings won’t go down the drain if something as pernicious as another financial crisis will tread upon our dreams literally.

  • Ana Sumber

    My retirement plan is still long enough ( I still have 20 more year ) Should i have any saving plan?

  • Richard

    Outliving your money. What a spector. The decision to keep working or working part time must be hard after a lifetime career.

  • David Hawthorne

    The worst part is there is a social expectation that we will be taken care of when we retire. The recent shake up in pension fund gives the lie to this notion. And starting to save when you’re in your 50’s and 60’s is not easy. Imagine the havoc longer lifespans will wreak on the financial system. Not an easy problem to solve from any angle.

  • ditho

    I strongly agree with the planning retirement.because it can guarantee a person’s life in the old age.and also person does not have to worry anymore with the rest of his life and the people can enjoy old age in peace.


    Interestingly enough, there is a lot of talk nowadays that kind of assumes that everyone agrees that we need to raise the age of retirement as life expectancy grows.
    In general, I think many people are working from the standard retirement planning of yesteryear, without rethinking things as they change. And things are changing rapidly.

  • hassam

    Outliving your money. What a spector. The decision to keep working or working part time must be hard after a lifetime career.

  • James Caron

    Life after retirement is quite dull I think. This is because one can not bear that he will earn no more after earning all his life. Depression lead one to death bed usually.

  • archive storage manchester

    Most companies offer the new version of retirement called the 401(k) program. If he isn’t in this and is eligible than both you and he are making a huge mistake. Most companies offer some type of match up to a certain percent. At my company it is 50% up to 4%.thanks

  • jin

    retirement is one of people afraid of due to less money. but we can see in singapore especially for old people, they still work as a cleaning service. means that no need to stay at home alone

  • Yeshua

    Life expectancy is often mishandled in retirement planning. Many people think they’ll never need to go into a skilled nursing facility. Long term care insurance looks like a good idea to me for anyone who wants to leave something to their heirs.