Financial advisers use life expectancy tables to estimate how long a client is likely to live. These tables are based on actuarial data, which compiles statistics such as mortality rates and life expectancies by age.
This information allows financial planners to determine how much money they should recommend clients to keep in their retirement accounts or invest in annuities. They may also use the tables when recommending other insurance policies, such as long-term care insurance.
The tables are based on averages, so they may not be accurate for everyone. Financial advisers use these tables to discuss the best options for their client’s needs and goals.
How Do They Analyse Your Retirement Plans?
There are notions that the tables are inaccurate and don’t take into account the fact that people may live longer or shorter than average. However, it’s important to remember that the tables are only a starting point for discussion.
Financial planners can use them as a guide to help clients determine what type of life insurance they need. Still, they should also consider factors like health status, lifestyle choices and family history when making their recommendations.
Here are some estimated financial protection projections on longevity according to age group.
- 85 years old is the estimated life expectancy of those people whose parents/grandparents lived only up to 70 years old
- 90 years old is the estimated life expectancy of a person with a spouse
- 100 years old for younger generations
Why is it Important to Analyse Longevity for Financial Protection?
There are a few key reasons why analysing longevity is essential for financial protection:
- It can help you to estimate how long your retirement savings will need to last.
- It can help you to determine how much you need to save for retirement.
- It can help you to plan for potential healthcare costs in retirement.
- It can help you to choose an appropriate retirement date.
Each of these factors is important in making sure that you have enough money to support yourself throughout retirement. Longevity analysis can better understand how long your retirement might last, how much you need to save and what potential healthcare costs you might face. This information can then be used to make more informed decisions about when to retire and how to best protect your financial well-being.
Conclusion
In this article, we’ve looked at how longevity analysis can help you plan for retirement. When you’re considering when to retire and what kind of lifestyle you want to enjoy during retirement, it is essential to consider all of the factors that might affect your financial well-being during this time. A longevity analysis can help you to see how long your retirement might last and whether or not it will be financially viable, given your current situation. This can allow you to make more informed decisions about when and how you want to retire.
If you’re looking to secure your retirement plan, contact New Wave Financial Planning today to find the best financial planner on the Gold Coast. We’ll help you make a personalised financial plan that’s tailored to your unique situation and goals.
