Picture: 123RF/FLYNT
Picture: 123RF/FLYNT

Two critical retirement planning questions you need to make assumptions about are - how long will I live and how well will I live? We don't have the answers, but there is now more information on the possibilities and probabilities.

We need to plan and save for how much income we will need in our later years when we stop working, but we don't know, with certainty, when we will die.

So this critical financial planning still involves quite a bit of guesswork, but expert insights can help you avoid costly mistakes.

A recent survey by annuity provider Just found that women underestimate how long they will live, while men overestimate.

If you live longer than you expect you may well run out of retirement savings, while for some a pension that an annuity provider bases on average life expectancies can offer you more security and a higher pension.

Not thinking about how long you might live or making any plans to fund that life at all - which many younger people do - is, however, the biggest mistake you can make. Only 55% of more than 500 South Africans aged between 50 and 85 surveyed by Just had considered how long they might live.

Also, remember that the longer you live, the greater your chances are of reaching an even higher age. When you are 40, you can - based on information about the average ages to which people live - expect to live to 85, but at age 65 you might find your life expectancy has moved to 95.

Sarah Harper, a longevity expert and professor of gerontology at Oxford University, raised three key points about life expectancy at the Actuarial Society of SA's convention in Sandton in November.

Reaching 100 isn't a 20th-century phenomenon

There have always been people who have lived for a long time. Geert Adriaans Boomgaard, born in 1788 in the Netherlands, died at 110 and is described as the world's first supercentenarian - a person who lives to 110 or beyond.

"We are seeing the mass ageing of populations," Harper says.

She says that by mid-century there could be more than 500,000 centenarians in the UK, and by 2050 there could be 120-million in Europe as a whole.

Life expectancy isn't increasing for everyone

Despite the increase in the averages, longer life expectancy is skewed towards those with a higher socioeconomic status. Life expectancy is increasing for those who can afford better care and food and have fewer worries about survival basics, Harper says.

A UK study showed that a healthy, high-income 65-year-old could expect to live 10 years longer than an unhealthy, low-income person the same age, she says.

"Cellular processes are affected by behaviour and environment. We know there are stresses in society, and they manifest, and we know we can make ourselves more resilient," Harper says.

"Social interactions protect us against cellular [degeneration], as can exercise and economic security."

Bruce Robertson, regional chief actuary at Gen Re SA, told the actuarial conference that the death rate for every disease is higher for the deprived than for the affluent.

"Recent trends have led to wider inequality. There have been no gains in life expectancy for the deprived," he said.

What else affects life expectancy?

Genes - you can blame your parents for that one. Harper says studies show longevity runs in families. "Supercentenarians have an exceptionally healthy ageing phenotype."

They are slim, have no history of major
illnesses and were insulin resistant when they were young, she says.

Behaviour and lifestyle factors such as obesity, smoking and excessive alcohol intake will, however, affect your chances of living a long life and can help to cause years of poor health, Harper says.

One study found that obesity in a 55-year-old man would reduce his life expectancy by 1.4 years and lead to 5.9 years of ill health.

For smoking, the figures are four years of reduced life expectancy and 3.8 years of poor health.

Dementia is another concern for those who expect to live to a ripe old age, with no treatment breakthroughs in sight. However, Harper says one study has linked increased years of study to lower levels of dementia.

"The more highly educated a population, the less dementia we [expect] to get."

However, while the incidence of dementia before age 70 might decrease, because there are now so many more people older than that, the net number of people with dementia may well increase, Harper says.

Just's survey of South Africans found 43% had given no thought to dementia in their retirement planning and only 27% had a proper plan for it.

So how long can we live?

Harper says some people believe humans do not necessarily have a maximum age and that future advances in science and medicine could see us living to 1,000 years and beyond. But many experts regard 115 as the limit for the vast majority of people.

There are indications that increases in life expectancy are slowing.

Lize-Mari Wiggill, an actuary at Gen Re, told the convention in Sandton that figures from the Human Mortality Database, a project launched by researchers in the US and Germany, show that the rate at which life expectancy increased between 2011 and 2016 slowed relative to the increase in the previous 10 years.

Robertson says diseases of despair such as suicide and opioid overdose are also taking a toll on life expectancies.

While that still leaves you with little certainty about your life expectancy, an accurate guesstimate should take into account:

• Your lifestyle - including your social life, exercise, eating, drinking and smoking habits;

• Your socioeconomic status - what you earn, how you live, and your education; and

• Your genes.

Financial planners recommend you plan for 30 years in retirement if you retire at age 65, but even that may not be enough.

According to Just, one in 10 65-year-old men will still be alive at 95 and one in 10 65-year-old women will still be alive at 100.

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