Death and taxes are the only certainties in an uncertain world, according to Benjamin Franklin. However you can take the chance and not pay your taxes, there will be consequences, but you can do this, but you cannot beat death.
The sad truth is when you are likely to die has a massive effect on retirement planning. The date of death is an unknown, so everyone has to take a punt on when and do their best to make sure they have enough money to survive retirement in relative financial comfort.
Guessing the date you are going to day is the first step of retirement planning, and a new report from financial firm Aviva gives some pointers about how long the average person will live. The first point to note is most retirement savers believe they will not live as long as estimates from the Office of National Statistics (ONS) suggest.
Costly wrong decisions “The financial implications of making the wrong decision are significant,” says the study ‘Making Your Money Last In Retirement’ from Aviva. “People who estimate they need a pension of $100,000 to top up the state pension could really need $150,000 or more had they accurately predicted their life expectancy.”
The research reveals 29% of men and 23% of women do not believe they will as long as the ONS figures say they will. Men fall short by an average 13 years in their calculations, reckoning they will die at 67 years old and women underestimate by 12 years, predicting they will die at 72 years old.
The ONS statistics show men retiring at 65 now live until an average 80 years old and women 84 years old. The report points out these figures are averages; so many people die younger and older.
The ONS reckons 32% of men retiring at 65 live over the 89 years old average age. “The chance of living to over 90 is one in three for a man and slightly higher for a woman,” says the report.
Life expectancy “Savings choices are crucial decisions. Annuities can provide guaranteed income if lifestyle or health reasons mean life expectancy is shorter and flexible drawdown can help if life expectancy is longer.” The firm goes on to explain how lifestyle, health and where you live affects how long you live. Factors like smoking and obesity are key players in determining longevity. “Genetics are random but lifestyle choices can affect longevity. Suddenly moving from an area with a low longevity rate to one where people live longer will not automatically mean a longer life though,” says the report. “However, statistics show that some areas have a population which is more prone to smoking or obesity than others. With few exceptions, the local authorities with the highest number of smokers also have the worst life expectancies.” - See more at: http://www.iexpats.com/long-live-key-retirement-saving/#sthash.8y3Ic5Xc.dpuf
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