How many years do you factor for retirement?

subjecttocontract

Some people, me included never give or gave much thought to retirement, one doesn't when you are young. Fortunately my employer ran a compulsory final salary pension plan. I was able to retire on a special early retirement plan giving me a full pension at 52. None of us know what's around the corner and I've lost many friends unexpectedly in their 50's & 60's. I think the safest plan is to build up the biggest pension, savings, investment & asset base that you can manage during your working life and hope for a long & happy retirement........it seems to be working for me.

B0bbyEwing

DoublePolaroid said:

It’s a mistake to look at family history and draw conclusions about your life expectancy unless serious, hereditary illnesses are present. 

The current generation on the cusp of retirement have on average a longer life expectancy than their parents had, due to a variety of factors including but not limited to better medical treatment - especially of cardiovascular disease and its risk factors - and significantly reduced smoking rates. 

In the absence of a known life limiting health condition or relevant family history, this calculator would be as good a place as any to start from in terms of planning for retirement. 

Wow. I come back after not long & it's already got 2 pages. Thanks for the time you lot have taken to respond.

Just wanted to touch on this one here though.

"It's a mistake....". 

If you think that I looked at family history & said well that guy there lived to 65 years & 2 months then by my mystical powers I predict I will live to precisely the same age then you're mistaken.

This is going to sound strange I suppose but from a very early age I've always had a bit of a fascination with death. So when doing the family tree I was just looking to see how long people lasted out of curiosity. My mothers side seem to last longer than my dads side. Mums side 70s-80s whereas my dads side are 40s-60s. Also there's been a history of heart issue on my dads side but whether that's genetic (tough luck) or self inflicted (smoking) who knows. To our knowledge there was only 1 count of cancer across both sides which was my mothers dad but not a major case & got it sorted. 

Regards the situation when people talk about "averages" and "modern medicine" - I tend to shut off to be perfectly honest. To explain why:

1) averages - bit like when people talk about temperatures. Scratch the surface & they're forever talking about London as though there's no other part of the UK that exists. Same with wages. Average wage is whatever it is. Totally irrelevant to me because I'm under it. All these unknowns don't matter to me because my situation is my situation. Other people with no connection to myself putting these averages up & down are irrelevant to me.

2) They've probably been talking about the advances in modern medicine since day 1 & in another 100 years they'll be saying the same - trying to keep cancer patients hopeful because "with the advances in modern medicine.....". 

There's no money in cures though. The money is in the constant patch ups. 

I know that's a very pessimistic view but well, so be it.

B0bbyEwing

biscan25 said:

I don't mind the morbidity, it's my job.

So if you want a simple answer, if I was retiring at 65 today as an averagely fit individual with a decent amount of wealth, I'd budget living to 87/89 depending on gender based on occupational pension scheme mortality tables, and some reasonable projections.

If you had an average amount of wealth, in general you won't live as long, so might say 85/87 for the average English person.

Direct answer. Love it. Thanks  

That's actually in & around my own personal planning. I'm hitting 40. I personally don't think I'll live massively beyond retirement. I've not taken a trip in a time ship or anything, it's just what I feel. Medically I've been quite unlucky throughout my life, however this unlucky run has been more joint issues than something that's going to kill me like organ problems. 

I'm fairly healthy & quite active. I'm not overweight I don't think. I'm sure some BMI readout will say I am but I think i'm reasonable. 5ft11 & 175lbs. My diet could be better (but then couldn't everyone's?) but it also isn't awful. I'll have spells where it's absolutely shocking but then a run where it's perfection so overall it's probably just alright I guess.

So I'd be happy with hitting 80s so my plan is to calculate for a bit beyond that such as 90. Who knows maybe I'll be way off & hit 100 and be struggling. Or maybe I'll die tomorrow.

biscan25 said:

In reality there's a huge amount of variability in longevity, so one should in theory budget for a higher estimate, and take into account their own health, bearing in mind that people tend to underestimate their life expectancy. If you smoke you'll need much less cash too!

I know that's the general viewpoint and it surely has to be correct as it has to be impossible to make a blanket 1-fits-all accurate statement.

My dad was born in 43. Smoked from his early teens IIRC, packed in in 1990. Never smoked again. Heart trouble from 1990 onwards, triple bypass surgery around 2003 ish, dying at 68 from .......... lung issue.
My grandad (mothers side) was born in the mid 30s, smoked from before he was even a teenager, heavy heavy smoker, finally gave up in his mid 70s....died the year after my dad. 

Could argue that without smoking they'd have lived longer but my grandad was like a chimney yet easily outlived my dad. 

But also my grandad didn't work for as long as I can remember, which would've put him in his 50s/60s and my dad worked (labouring) up until 65. Maybe that played a role too. All lifes factors.

biscan25 said:

Some benevolent souls might care about their descendants, and not mind leaving an inheritance, so they might draw less from their pension to make sure they don't run out.

Thankfully we have no children so can focus on thinking about nobody but ourselves

B0bbyEwing

Albermarle said:

dunstonh said:

Generally, half will make 94, and 10% will make 97.    Those ages will change based on date of birth but they are a good yardstick.

This does not really match with the figures mentioned in other posts/ONS calculator , where for example an average 65year will last about 20/22 years ??

I thought the same as you when I read that.

I do wonder 1) who makes these figures up and 2) where they pull this data from.

So half the population are going to be damn near 100 before they die? Well I'm going to go against the grain then and say no they're not - that isn't accurate.

The amount of people I've known who have died aged 20-70 vs those who have lived even 75-99 is night & day. Going off that post, most should be in the latter category but that really isn't the case. 

I'd say if you took a 10 mile radius sweep of where I live now & of all the houses in that sweep, what the ages were of the people who died who last lived in those houses it'd back up what I'm saying.

I've no actual evidence to back up what I say, I just find the above statement very very very hard to believe to the point I just simply don't believe it. I'm sure it was written by someone who was told to do a report & they left it last minute & thought I better just throw some numbers down on paper else my boss will haul me in to his office.

Albermarle

B0bbyEwing said:

DoublePolaroid said:

It’s a mistake to look at family history and draw conclusions about your life expectancy unless serious, hereditary illnesses are present. 

The current generation on the cusp of retirement have on average a longer life expectancy than their parents had, due to a variety of factors including but not limited to better medical treatment - especially of cardiovascular disease and its risk factors - and significantly reduced smoking rates. 

In the absence of a known life limiting health condition or relevant family history, this calculator would be as good a place as any to start from in terms of planning for retirement. 

Wow. I come back after not long & it's already got 2 pages. Thanks for the time you lot have taken to respond.

Just wanted to touch on this one here though.

"It's a mistake....". 

If you think that I looked at family history & said well that guy there lived to 65 years & 2 months then by my mystical powers I predict I will live to precisely the same age then you're mistaken.

This is going to sound strange I suppose but from a very early age I've always had a bit of a fascination with death. So when doing the family tree I was just looking to see how long people lasted out of curiosity. My mothers side seem to last longer than my dads side. Mums side 70s-80s whereas my dads side are 40s-60s. Also there's been a history of heart issue on my dads side but whether that's genetic (tough luck) or self inflicted (smoking) who knows. To our knowledge there was only 1 count of cancer across both sides which was my mothers dad but not a major case & got it sorted. 

Regards the situation when people talk about "averages" and "modern medicine" - I tend to shut off to be perfectly honest. To explain why:

1) averages - bit like when people talk about temperatures. Scratch the surface & they're forever talking about London as though there's no other part of the UK that exists. Same with wages. Average wage is whatever it is. Totally irrelevant to me because I'm under it. All these unknowns don't matter to me because my situation is my situation. Other people with no connection to myself putting these averages up & down are irrelevant to me.

2) They've probably been talking about the advances in modern medicine since day 1 & in another 100 years they'll be saying the same - trying to keep cancer patients hopeful because "with the advances in modern medicine.....". 

There's no money in cures though. The money is in the constant patch ups. 

I know that's a very pessimistic view but well, so be it.

It is not too pessimistic, it is just that you are concentrating on  situations/events  that reinforce your view of the world ( like we all tend to do) 
The hard statistics show that average life expectancy in the UK is about 80. If you have managed to reach 60/65, then you can expect to live until your mid 80's on average, which means 50% will live longer than that.

OldScientist

B0bbyEwing said:

Albermarle said:

dunstonh said:

Generally, half will make 94, and 10% will make 97.    Those ages will change based on date of birth but they are a good yardstick.

This does not really match with the figures mentioned in other posts/ONS calculator , where for example an average 65year will last about 20/22 years ??

I thought the same as you when I read that.

I do wonder 1) who makes these figures up and 2) where they pull this data from.

So half the population are going to be damn near 100 before they die? Well I'm going to go against the grain then and say no they're not - that isn't accurate.

The amount of people I've known who have died aged 20-70 vs those who have lived even 75-99 is night & day. Going off that post, most should be in the latter category but that really isn't the case. 

I'd say if you took a 10 mile radius sweep of where I live now & of all the houses in that sweep, what the ages were of the people who died who last lived in those houses it'd back up what I'm saying.

I've no actual evidence to back up what I say, I just find the above statement very very very hard to believe to the point I just simply don't believe it. I'm sure it was written by someone who was told to do a report & they left it last minute & thought I better just throw some numbers down on paper else my boss will haul me in to his office.

I suspect that for a single retiree the 94 was a typo (although 84 would probably be a bit under the 50% mark). However, for a M/F couple, each aged 65, the probability of at least one reaching 92 is about half and reaching 100 about 10%).

The raw data at the ONS comes from death certificates... for cohort statistics (the ones you are interested in) the ONS use historical rates of increases in longevity to predict how long someone who is now 40 (or whatever) will live. How accurate those predictions turn out to be will not be known for some time (and they are periodically revised - e.g. predicted life expectancies in 2010 or so were much higher than they are now)!

There are also data at the ONS dealing with the effect of socioeconomic grouping (see https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/lifeexpectancies/bulletins/trendinlifeexpectancyatbirthandatage65bysocioeconomicpositionbasedonthenationalstatisticssocioeconomicclassificationenglandandwales/latest) with the unsurprising result that rich people tend to live longer than poor people (up to 9 years from birth). However, apart from a breakdown by nation (England, Wales, etc.) I haven't seen a regional breakdown published by the ONS (although I understand actuarial tables do include this) - if someone has a link that would be nice.

In terms of planning your retirement, you can always use a range of reasonable ages (say from 85 to 105) rather than just a single age to give you a range of outcomes.

DoublePolaroid

B0bbyEwing said:

DoublePolaroid said:

It’s a mistake to look at family history and draw conclusions about your life expectancy unless serious, hereditary illnesses are present. 

The current generation on the cusp of retirement have on average a longer life expectancy than their parents had, due to a variety of factors including but not limited to better medical treatment - especially of cardiovascular disease and its risk factors - and significantly reduced smoking rates. 

In the absence of a known life limiting health condition or relevant family history, this calculator would be as good a place as any to start from in terms of planning for retirement. 

Wow. I come back after not long & it's already got 2 pages. Thanks for the time you lot have taken to respond.

Just wanted to touch on this one here though.

"It's a mistake....". 

If you think that I looked at family history & said well that guy there lived to 65 years & 2 months then by my mystical powers I predict I will live to precisely the same age then you're mistaken.

This is going to sound strange I suppose but from a very early age I've always had a bit of a fascination with death. So when doing the family tree I was just looking to see how long people lasted out of curiosity. My mothers side seem to last longer than my dads side. Mums side 70s-80s whereas my dads side are 40s-60s. Also there's been a history of heart issue on my dads side but whether that's genetic (tough luck) or self inflicted (smoking) who knows. To our knowledge there was only 1 count of cancer across both sides which was my mothers dad but not a major case & got it sorted. 

Regards the situation when people talk about "averages" and "modern medicine" - I tend to shut off to be perfectly honest. To explain why:

1) averages - bit like when people talk about temperatures. Scratch the surface & they're forever talking about London as though there's no other part of the UK that exists. Same with wages. Average wage is whatever it is. Totally irrelevant to me because I'm under it. All these unknowns don't matter to me because my situation is my situation. Other people with no connection to myself putting these averages up & down are irrelevant to me.

2) They've probably been talking about the advances in modern medicine since day 1 & in another 100 years they'll be saying the same - trying to keep cancer patients hopeful because "with the advances in modern medicine.....". 

There's no money in cures though. The money is in the constant patch ups. 

I know that's a very pessimistic view but well, so be it.

Smoking is the biggest risk factor for heart disease so if you’ve had a heart attack and you’ve been a regular smoker, it’s a huge contributory factor. If you don’t smoke and your relatives did, you’re already relatively winning, all things being equal.

There will never be a ‘cure’ for heart disease IMO as long as there is no cure for ageing, because the inexorable furring up of arteries as we age is inevitable from about the late teens onwards. All that can be done is manage the modifiable risk factors that accelerate it (smoking, high BP, poor diet, lack of exercise etc). There’s no value in worrying about the stuff like genetics, age and sex which can’t be modified. 

As for medical advances, treatment of heart disease really has been revolutionised. Even in the 20 years since I was a student, heart attacks have gone from being treated with sometimes ineffective drugs which had the potential to kill you to victims being scooped up and taken directly via ambulance to a catheter lab and having a cardiologist unblock their plumbing within a couple of hours of the onset of the attack. 

This is all a very circuitous way of trying to provide an antidote, if not a cure, to your pessimism.

OldMusicGuy

I retired four years ago at 61 and I have a detailed spreadsheet that forecasts all income and expenditure (including tax, inflation and investment growth) up to age 95 for both of us. After that I assume we will likely be in a care home, and the budget assumes we will need a reasonable chunk of money available to fund care by then.

So I'm planning for us reaching a fine old age because that's what I hope to do. I'm trying to stay fit and healthy for as long as possible.

My advice is not to use family history (or anecdotal evidence based on people you know) as an excuse to get out of planning for a long retirement. Unless you have a diagnosed, life shortening condition IMO it's unwise to assume you will die before reaching a fine old age. You may well die before you hit your 90s, but if you do reach your 90s you don't want to be left without enough money. At least I don't........

If it's of any interest, my FiL is 95 and is just about to go into a care home. We are trying to plan his finances and it's hard to predict how long he will live. Although quite frail he is in good health and we can see him going on for a few years yet. The oldest resident in the home is 105...... 

Albermarle

If it's of any interest, my FiL is 95 and is just about to go into a care home. We are trying to plan his finances and it's hard to predict how long he will live. Although quite frail he is in good health and we can see him going on for a few years yet. The oldest resident in the home is 105...... 

MY OH's Uncle and Aunt are both 99,and just about to move from their home to sheltered housing ( not a care home ) 

Apodemus

I don't know about morbid, but this thread is certainly a bit depressing - not because of the discussion about our eventual demise, but to read of someone "hitting 40" who doesn't realise that time is on their side to radically improve their health and chances of a much longer active life.  And also to read that anyone can doubt the almost exponential advances in the health sciences over the last couple of decades.  We are not only delivering huge advances in treatment options for a wide range of ailments but also learning more every day about the long term effects of simple daily changes to diet and fitness.

As for calculating retirement, my plan is to live as long as possible and pass on as much wealth as possible to my kids.  So my financial planning is all about sustainable use of my existing financial resources, rather than blow it all now and hope that the state will look after me in my dotage!