Topic 4 – Probability of Longevity

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So let’s look at longevity risk for a moment and talk about that risk multiplier. When we know that we’re going to live into our nineties or possibly 100, we have to plan for a lengthy retirement and make sure that we’re not withdrawing money out too fast from our retirement income sources. Let’s look at some statistics about longevity. They may be surprising to you.

So we see where there’s a 25% probability that a single male will live to age 94. A single female will live to age 96 and also a couple that retires at age 65, there’s a 25% chance that one of you two will live to age 98. Now we’re approaching that century mark. And as we look at our next group of figures, we see that there’s a, still a slight chance, okay, maybe a 2 to 3% chance, but certainly that’s worth considering that a single male will live to age 100, a single female will live to age 102, and that it in a couples retirement, that one of the two may beyond the century mark when they finally pass on. Longevity risk is certainly something that we should consider, and we should look at our family’s history as far as how long our brothers and sisters lived, how long our parents lived and any other close relations that might’ve had longevity in our favor. I often say that longevity is a great thing, if you have all your marbles, if you have your cognitive reasoning, you have your health. And most of our clients at The Coastal Financial Planning Group will take that life into their nineties and one hundreds with all of those resources. So we need to plan on the most important resource, also being there, and that’s your income to take you throughout retirement?

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