Life Tables and Retirement Planning

One of the central questions in retirement planning is, “How long should I plan for my retirement?” Of course, this is unknowable – it depends on how long we’ll live, and we don’t know what our lifespan will be. Ideally, we’d like to be able to spend relatively evenly over the course of our retirement such that we exhaust our nest egg on the day we pass away (minus any inheritance we’d like to pass on), but this would require perfect knowledge of both our lifespan and economic conditions over the course of our retirement. There are lots of tools to help investigate the effect of variable economic conditions on retirement withdrawal schemes, through modelling based on historical data or future projections – for example, FIRECalc or CFireSim – but these expect as an input the length of time to model – i.e., the expected lifespan of the retiree(s). So what should you pick as the timespan, and why?

One answer is surprisingly simple. If you want to be 95% confident you won’t outlive your funds, then: if you’re a male in the US under age 65, plan for a retirement to age 96 (if you’re between 66 and 77, go for age 97); if you’re female and under age 75, plan for a retirement to age 99. (If you’re a couple it’s only a bit more complicated – that’s discussed below.)

Thus if you’re a male at usual retirement age (65 to 67), you should plan for about a 30-year retirement period, and if you’re female about a 35-year period.

But what’s special about age 96 or 99 – why should you plan for this particular age as the span of your retirement? These are the ages for which there’s only a 5% chance that a male or female will live beyond – i.e., there’s a 95% chance you won’t live beyond 96 (99 if you’re female) if you’re currently under 65 (75 female). The following explains and expands on this.

Life Tables and Confidence

The results above come from mortality (life) tables. These give information about the probability that a person of a given age will live to some (older) age. These tables are compiled by looking at actual mortality data for some group – say, all males or females in the US – and are provided by governments and insurance companies to understand and predict lifespan trends for the population. Whether these are applicable depends on whether the group surveyed is representative for you – obviously lifespans vary depending on the target group (male vs female, country, subculture, etc.) Additionally, since they’re based on data from the past, they may not be representative of future lifespans due to changes in public health (new diseases, increased poverty, etc.), though actuaries do try to take some of this into account in some tables. And they’re tables that average across a whole population – the actual lifespan expectations for an individual might be significantly different because of his/her health and genetics and other factors. But they’re a good source of information for getting a general estimate of lifespan for retirement purposes.

One of the key tables that is publicly available is the actuarial life table provided by the Social Security Administration (see references) and shown below. This table displays several things: the probability of dying at a given age, the fraction of people who live to that age (expressed as number of survivors out of an initial population of 100000), and the lifespan. This last is just the average number of years remaining before death for a person of the given age, i.e., the expected value from probability theory.

Social Security Administration Actuarial Life Table

Male     Female    
Age Death prob Survivors Lifespan Death prob Survivors Lifespan
0 0.006569 100000 76.18 0.005513 100000 80.95
1 0.000444 99343 75.69 0.000382 99449 80.39
2 0.000291 99299 74.72 0.000218 99411 79.42
3 0.000226 99270 73.74 0.000166 99389 78.44
4 0.000173 99248 72.76 0.000143 99373 77.45
5 0.000158 99230 71.77 0.000127 99358 76.47
6 0.000147 99215 70.78 0.000116 99346 75.48
7 0.000136 99200 69.79 0.000106 99334 74.48
8 0.000121 99187 68.8 0.000098 99324 73.49
9 0.000104 99175 67.81 0.000091 99314 72.5
10 0.000092 99164 66.82 0.000086 99305 71.51
11 0.000097 99155 65.82 0.000089 99296 70.51
12 0.000134 99146 64.83 0.000102 99288 69.52
13 0.00021 99132 63.84 0.000128 99277 68.52
14 0.000317 99112 62.85 0.000164 99265 67.53
15 0.000433 99080 61.87 0.000205 99248 66.54
16 0.000547 99037 60.9 0.000246 99228 65.56
17 0.000672 98983 59.93 0.000285 99204 64.57
18 0.000805 98917 58.97 0.000319 99175 63.59
19 0.000941 98837 58.02 0.00035 99144 62.61
20 0.001084 98744 57.07 0.000383 99109 61.63
21 0.001219 98637 56.13 0.000417 99071 60.66
22 0.001314 98517 55.2 0.000446 99030 59.68
23 0.001357 98387 54.27 0.000469 98986 58.71
24 0.001362 98254 53.35 0.000487 98939 57.74
25 0.001353 98120 52.42 0.000505 98891 56.76
26 0.00135 97987 51.49 0.000525 98841 55.79
27 0.001353 97855 50.56 0.000551 98789 54.82
28 0.001371 97722 49.63 0.000585 98735 53.85
29 0.001399 97588 48.69 0.000626 98677 52.88
30 0.001432 97452 47.76 0.000672 98615 51.92
31 0.001464 97312 46.83 0.00072 98549 50.95
32 0.001497 97170 45.9 0.000766 98478 49.99
33 0.00153 97024 44.96 0.000806 98403 49.02
34 0.001568 96876 44.03 0.000846 98323 48.06
35 0.001617 96724 43.1 0.000891 98240 47.1
36 0.001682 96568 42.17 0.000946 98153 46.15
37 0.001759 96405 41.24 0.001013 98060 45.19
38 0.001852 96236 40.31 0.001094 97960 44.23
39 0.001963 96057 39.39 0.00119 97853 43.28
40 0.002092 95869 38.46 0.001296 97737 42.33
41 0.002246 95668 37.54 0.001413 97610 41.39
42 0.002436 95453 36.62 0.001549 97472 40.45
43 0.002669 95221 35.71 0.001706 97321 39.51
44 0.002942 94967 34.81 0.001881 97155 38.57
45 0.003244 94687 33.91 0.002069 96972 37.65
46 0.003571 94380 33.02 0.00227 96772 36.72
47 0.003926 94043 32.13 0.002486 96552 35.81
48 0.004309 93674 31.26 0.002716 96312 34.89
49 0.004719 93270 30.39 0.00296 96050 33.99
50 0.005156 92830 29.53 0.003226 95766 33.09
51 0.005622 92352 28.68 0.003505 95457 32.19
52 0.006121 91832 27.84 0.003779 95123 31.3
53 0.006656 91270 27.01 0.00404 94763 30.42
54 0.007222 90663 26.19 0.004301 94380 29.54
55 0.007844 90008 25.38 0.004592 93974 28.67
56 0.008493 89302 24.57 0.00492 93543 27.8
57 0.009116 88544 23.78 0.005266 93083 26.93
58 0.00969 87736 22.99 0.00563 92592 26.07
59 0.010253 86886 22.21 0.006028 92071 25.22
60 0.010872 85995 21.44 0.006479 91516 24.37
61 0.011591 85060 20.67 0.007001 90923 23.52
62 0.012403 84075 19.9 0.007602 90287 22.68
63 0.013325 83032 19.15 0.008294 89600 21.85
64 0.01437 81925 18.4 0.009082 88857 21.03
65 0.015553 80748 17.66 0.00999 88050 20.22
66 0.016878 79492 16.93 0.011005 87171 19.42
67 0.018348 78151 16.21 0.012097 86211 18.63
68 0.019969 76717 15.51 0.013261 85168 17.85
69 0.021766 75185 14.81 0.014529 84039 17.09
70 0.02384 73548 14.13 0.015991 82818 16.33
71 0.026162 71795 13.47 0.017662 81494 15.59
72 0.028625 69917 12.81 0.019486 80054 14.86
73 0.031204 67915 12.18 0.021467 78494 14.14
74 0.033997 65796 11.55 0.023658 76809 13.44
75 0.0372 63559 10.94 0.026223 74992 12.76
76 0.040898 61195 10.34 0.029159 73026 12.09
77 0.04504 58692 9.76 0.032331 70896 11.44
78 0.049664 56048 9.2 0.035725 68604 10.8
79 0.054844 53265 8.66 0.039469 66153 10.18
80 0.060801 50344 8.13 0.043828 63542 9.58
81 0.067509 47283 7.62 0.048896 60757 9
82 0.074779 44091 7.14 0.054577 57786 8.43
83 0.082589 40794 6.68 0.060909 54633 7.89
84 0.091135 37424 6.23 0.068019 51305 7.37
85 0.10068 34014 5.81 0.076054 47815 6.87
86 0.111444 30589 5.4 0.085148 44179 6.4
87 0.123571 27180 5.02 0.095395 40417 5.94
88 0.137126 23822 4.65 0.106857 36561 5.52
89 0.152092 20555 4.31 0.119557 32655 5.12
90 0.168426 17429 4 0.133502 28751 4.75
91 0.186063 14493 3.7 0.148685 24912 4.4
92 0.204925 11797 3.44 0.165088 21208 4.08
93 0.224931 9379 3.19 0.182685 17707 3.79
94 0.245995 7270 2.97 0.201442 14472 3.53
95 0.266884 5481 2.78 0.220406 11557 3.29
96 0.287218 4018 2.61 0.239273 9010 3.08
97 0.306593 2864 2.46 0.257714 6854 2.89
98 0.324599 1986 2.33 0.275376 5088 2.72
99 0.340829 1341 2.21 0.291899 3687 2.56
100 0.35787 884 2.09 0.309413 2610 2.41
101 0.375764 568 1.98 0.327978 1803 2.27
102 0.394552 354 1.88 0.347656 1211 2.13
103 0.41428 215 1.77 0.368516 790 2
104 0.434993 126 1.68 0.390627 499 1.87
105 0.456743 71 1.58 0.414064 304 1.75
106 0.47958 39 1.49 0.438908 178 1.64
107 0.503559 20 1.4 0.465243 100 1.53
108 0.528737 10 1.32 0.493157 53 1.43
109 0.555174 5 1.24 0.522747 27 1.33
110 0.582933 2 1.16 0.554111 13 1.23
111 0.61208 1 1.09 0.587358 6 1.14
112 0.642683 0 1.02 0.622599 2 1.06
113 0.674818 0 0.95 0.659955 1 0.98
114 0.708559 0 0.89 0.699553 0 0.9
115 0.743986 0 0.82 0.741526 0 0.83
116 0.781186 0 0.76 0.781186 0 0.76
117 0.820245 0 0.71 0.820245 0 0.71
118 0.861257 0 0.65 0.861257 0 0.65
119 0.90432 0 0.6 0.90432 0 0.6

The lifespan from this life table seems like a reasonable value to take as the timespan for a retirement plan. For example, if you’re male and plan to retire at age 62, you would be expected to live on average an additional 19.9 years, so you might take 20 years as the timespan for funding your retirement.

On the other hand, the problem with this approach is that it applies only if your lifespan is average. If you live a shorter time, you’ll have money left unspent, which is less than ideal, but not exactly a tragedy (since you’re dead anyway); but if you live longer than average and have planned your retirement funding based on the average, it is a tragedy as you’re still very much alive, but possibly broke. Put another way, with this expected-lifespan approach, roughly half of retirees should expect to run out of funds. Since this is an outcome we really want to avoid, using averages is probably not the best approach to selecting a timespan for funding retirement.

An alternate would be to select a timeframe such that you simply can’t outlive it. From the chart, virtually nobody makes it past 119, so our 62-year-old male could try to fund his retirement for a period of 57 years. Of course, this virtually guarantees that he’ll underspend, and be left with a large pile at the end.

A better approach is to use the survivor data in the table and determine an age such that it is very unlikely (but not impossible) that we will outlive it. For example, we could use the table to determine a lifespan with 95% (or other) confidence – determine, for a person of a given age, the lifespan such that only 5% of people at that starting age will live that long. This is easy to do from the above life table – just take the pool of people who have made it to the given age, and then find the age such that only 5% of this original pool are left. For example, for a 62 year old male, he is one of the 84075 people from the original 100,000 to have been lucky enough to have made it to the age of 62. From this initial group of 84075 people, 5% is 4204. Llooking at the table, we see that 5481 people will make it to 95 years of age, and 4018 will make it to 96; so being conservative, we can choose 96 as the age for which we can be 95% confident that our 62-year-old male won’t live beyond, which corresponds to a remaining lifespan of 34 years. Thus a reasonable timespan target for his retirement would be something like 35 years. If 95% doesn’t give you enough confidence – after all, the table shows that 5% of 62-year-old men will be expected to live past 96 – you can do the same for 99% or even 99.9% confidence.

What is particularly interesting is that the “95%-confidence” age computed above is relatively insensitive to the starting age. Below is a table giving the 95%-confidence age for males for all ages from 0 to 119. Notice that the age is the same – 96 – for all ages from 0 to 65; whatever your current age, from 0 to 65, you can expect that only about 5% of your cohort will live past 96. Even if you’re between 66 and 77, your 95%-confidence age is 97, regardless of your age in that range. For other confidence levels, there’s a similar pattern – for 90% confidence, the age which only 10% of your cohort will exceed is 93 for ages below 47, and 94 for ages 48 to 70.

Male Lifespan Confidence Table

Age 50% 80% 90% 95% 98% 99%
0 81 90 93 96 98 100
1 81 90 93 96 98 100
2 81 90 93 96 99 100
3 81 90 93 96 99 100
4 81 90 93 96 99 100
5 81 90 93 96 99 100
6 81 90 93 96 99 100
7 81 90 93 96 99 100
8 81 90 93 96 99 100
9 81 90 93 96 99 100
10 81 90 93 96 99 100
11 81 90 93 96 99 100
12 81 90 93 96 99 100
13 81 90 93 96 99 100
14 81 90 93 96 99 100
15 81 90 93 96 99 100
16 81 90 93 96 99 100
17 81 90 93 96 99 100
18 81 90 93 96 99 100
19 81 90 93 96 99 100
20 81 90 93 96 99 100
21 81 90 93 96 99 100
22 81 90 93 96 99 100
23 81 90 93 96 99 100
24 81 90 93 96 99 100
25 81 90 93 96 99 100
26 81 90 93 96 99 100
27 81 90 93 96 99 100
28 81 90 93 96 99 100
29 81 90 93 96 99 100
30 81 90 93 96 99 100
31 81 90 93 96 99 100
32 81 90 93 96 99 100
33 81 90 93 96 99 100
34 81 90 93 96 99 100
35 81 90 93 96 99 100
36 81 90 93 96 99 100
37 81 90 93 96 99 100
38 81 90 93 96 99 100
39 81 90 93 96 99 100
40 81 90 93 96 99 100
41 81 90 93 96 99 100
42 81 90 93 96 99 100
43 81 90 93 96 99 100
44 81 90 93 96 99 100
45 81 90 93 96 99 100
46 82 90 93 96 99 100
47 82 90 93 96 99 100
48 82 90 94 96 99 100
49 82 90 94 96 99 100
50 82 90 94 96 99 100
51 82 90 94 96 99 100
52 82 90 94 96 99 100
53 82 90 94 96 99 100
54 82 90 94 96 99 100
55 82 90 94 96 99 100
56 82 90 94 96 99 100
57 82 90 94 96 99 100
58 83 90 94 96 99 101
59 83 91 94 96 99 101
60 83 91 94 96 99 101
61 83 91 94 96 99 101
62 83 91 94 96 99 101
63 83 91 94 96 99 101
64 83 91 94 96 99 101
65 84 91 94 96 99 101
66 84 91 94 97 99 101
67 84 91 94 97 99 101
68 84 91 94 97 99 101
69 84 91 94 97 99 101
70 85 91 94 97 99 101
71 85 92 95 97 99 101
72 85 92 95 97 99 101
73 86 92 95 97 99 101
74 86 92 95 97 100 101
75 86 92 95 97 100 101
76 86 92 95 97 100 101
77 87 93 95 97 100 101
78 87 93 95 98 100 102
79 88 93 96 98 100 102
80 88 93 96 98 100 102
81 89 93 96 98 100 102
82 89 94 96 98 101 102
83 90 94 96 98 101 102
84 90 94 97 99 101 102
85 91 95 97 99 101 103
86 91 95 97 99 101 103
87 92 96 98 99 102 103
88 92 96 98 100 102 103
89 93 96 98 100 102 104
90 94 97 99 101 103 104
91 95 97 99 101 103 104
92 95 98 100 101 103 105
93 96 99 100 102 104 105
94 97 99 101 102 104 105
95 98 100 102 103 105 106
96 98 101 102 104 105 106
97 99 101 103 104 106 107
98 100 102 104 105 106 108
99 101 103 104 106 107 108
100 102 104 105 106 108 109
101 103 105 106 107 108 109
102 104 106 107 108 109 110
103 105 106 107 108 110 110
104 106 107 108 109 110 111
105 107 108 109 110 111 112
106 108 109 110 111 112 112
107 109 110 111 112 112 112
108 110 111 112 112 112 112
109 110 112 112 112 112 112
110 112 112 112 112 112 112
111 112 112 112 112 112 112
112 113 113 113 113 113 113
113 114 114 114 114 114 114
114 115 115 115 115 115 115
115 116 116 116 116 116 116
116 117 117 117 117 117 117
117 118 118 118 118 118 118
118 119 119 119 119 119 119
119 119 119 119 119 119 119

 

We can do the same for women, and the table is below. This shows the same general pattern – the 95% confidence age for a woman is 99, whatever her age might be as long as it’s less than 75. It’s worth noting that the 95%-confidence age for a woman is greater than that for a man, which reflects the fact from the original life tables that women are generally expected to live longer than men.

Female Lifespan Confidence Table

Age 50% 80% 90% 95% 98% 99%
0 85 93 96 99 101 103
1 85 93 96 99 101 103
2 85 93 96 99 101 103
3 85 93 96 99 101 103
4 85 93 96 99 101 103
5 85 93 96 99 101 103
6 85 93 96 99 101 103
7 85 93 96 99 101 103
8 85 93 96 99 101 103
9 85 93 96 99 101 103
10 85 93 96 99 101 103
11 85 93 96 99 101 103
12 85 93 96 99 101 103
13 85 93 96 99 101 103
14 85 93 96 99 101 103
15 85 93 96 99 101 103
16 85 93 96 99 101 103
17 85 93 96 99 101 103
18 85 93 96 99 101 103
19 85 93 96 99 101 103
20 85 93 96 99 101 103
21 85 93 96 99 101 103
22 85 93 96 99 101 103
23 85 93 96 99 101 103
24 85 93 96 99 101 103
25 85 93 96 99 101 103
26 85 93 96 99 101 103
27 85 93 96 99 101 103
28 85 93 96 99 101 103
29 85 93 96 99 101 103
30 85 93 96 99 101 103
31 85 93 96 99 101 103
32 85 93 96 99 101 103
33 85 93 96 99 101 103
34 85 93 96 99 101 103
35 85 93 96 99 101 103
36 85 93 96 99 101 103
37 85 93 96 99 101 103
38 85 93 96 99 101 103
39 85 93 96 99 101 103
40 85 93 96 99 101 103
41 85 93 96 99 101 103
42 85 93 96 99 101 103
43 85 93 96 99 101 103
44 85 93 96 99 101 103
45 85 93 96 99 101 103
46 85 93 96 99 101 103
47 85 93 96 99 101 103
48 85 93 96 99 101 103
49 85 93 96 99 101 103
50 85 93 96 99 101 103
51 86 93 96 99 101 103
52 86 93 96 99 101 103
53 86 93 96 99 101 103
54 86 93 96 99 101 103
55 86 93 96 99 101 103
56 86 93 96 99 101 103
57 86 93 96 99 101 103
58 86 93 96 99 101 103
59 86 93 96 99 101 103
60 86 93 96 99 101 103
61 86 93 96 99 101 103
62 86 93 96 99 101 103
63 86 93 97 99 102 103
64 86 93 97 99 102 103
65 87 94 97 99 102 103
66 87 94 97 99 102 103
67 87 94 97 99 102 103
68 87 94 97 99 102 103
69 87 94 97 99 102 103
70 87 94 97 99 102 103
71 87 94 97 99 102 103
72 88 94 97 99 102 103
73 88 94 97 99 102 104
74 88 94 97 99 102 104
75 88 94 97 99 102 104
76 89 94 97 100 102 104
77 89 95 97 100 102 104
78 89 95 97 100 102 104
79 89 95 98 100 102 104
80 90 95 98 100 102 104
81 90 95 98 100 102 104
82 90 95 98 100 103 104
83 91 96 98 100 103 104
84 91 96 98 101 103 104
85 92 96 99 101 103 105
86 92 97 99 101 103 105
87 93 97 99 101 103 105
88 93 97 100 101 104 105
89 94 98 100 102 104 105
90 95 98 100 102 104 106
91 95 99 101 102 105 106
92 96 99 101 103 105 106
93 97 100 102 103 105 107
94 97 100 102 104 106 107
95 98 101 103 104 106 107
96 99 102 103 105 106 108
97 100 102 104 105 107 108
98 101 103 104 106 107 109
99 101 104 105 106 108 109
100 102 104 106 107 109 110
101 103 105 106 108 109 110
102 104 106 107 108 110 111
103 105 107 108 109 110 111
104 106 108 109 110 111 112
105 107 108 109 110 111 112
106 108 109 110 111 112 113
107 109 110 111 112 113 114
108 110 111 112 112 113 114
109 110 112 112 113 114 114
110 111 112 113 114 114 114
111 112 113 114 114 114 114
112 114 114 114 114 114 114
113 114 114 114 114 114 114
114 115 115 115 115 115 115
115 116 116 116 116 116 116
116 117 117 117 117 117 117
117 118 118 118 118 118 118
118 119 119 119 119 119 119
119 119 119 119 119 119 119

 

This gives some guidance on what is reasonable to pick as the timespan for retirement planning. Targeting a timespan that takes a man’s expected retirement period to age 96 or 97 will give him 95% confidence that he won’t outlive his planning window, whatever his current age (under 77). That’s certainly a higher confidence than anything you can say about the economic conditions your planning will have to weather.

(Footnote: The 95% confidence ages aren’t really exactly the same for ages 0 to 65 – they just appear that because of the 1-year granularity in the data in the original life table. Thus the 95%-confidence age for a 62-year-old male isn’t 96, but rather might be something like 95.8 or so, and the 95%-confidence age for a 65-year-old might be 95.9. So the ages aren’t really exactly the same, but still change quite slowly. And the 1-year granularity gives an accurate enough picture for selecting a retirement timeline – there’s little point in planning for 34.8 years rather than 35 years.)

Couples

Of course, many retirees are couples, and thus have two to worry about. To handle this we need what is termed a joint-life table. This is a table which looks at the likelihood that either spouse will live beyond a certain age. We can get this information from the base life table if we assume that the lifespans of the spouses are independent of each other. This is probably not strictly true, as the loss of a spouse can have a significant negative affect on the other that can lead to a rapid decline, and there are certainly situations where the deaths will be likely to occur together (automobile accidents, for example), but for planning purposes it’s reasonable to treat the lifespans as being independent.

We can thus create a 95%-confidence-age table that indicates the age for which there’s only a 5% chance that one (or both) of the couple will live beyond. A complication is that we’d like to look at the table as a function of starting age, as before, but since couples often have different ages we have two starting ages to consider, that of each spouse. One way to handle this is to use the age of one spouse, and the difference in age for the second, as our parameters, since even though the ages will change the difference in ages will stay the same.

The table at the link below provides the joint 95%-confidence age for a male-female couple, where the male’s age is the row label and the female’s age difference is the column. So a couple in which the male is 62 and the female is 58 would correspond to the row for age 62 and the column for age-difference -4. For this case we see that the joint 95%-confidence age is 103. Note that the age listed in the table corresponds to the man’s age – i.e., the 62/58 year old couple should plan a retirement to last 103 – 62 = 41 years to be 95% confidence that neither will outlive their money.

Male-Female Joint Lifespan Table – 95% Confidence

What’s interesting is that the 95%-confidence age for this couple is 103 for a large range of ages, and would be the same target age whether the couple were doing its planning at the man’s age 40 (woman’s age 36) or age 70 (66). Thus as for a single retiree, the 95%-confidence age for a couple is seen to be quite insensitive to age.

One thing worth noting is that the joint 95%-confidence age in the table is higher than the 95%-confidence age for either spouse alone, which makes sense: we’re trying to ensure that neither exceeds the specified age, and with two there’s a greater chance of that happening than for just one. Of course, the larger the age difference, the less effect the older spouse will have on the result, and that becomes clear when we replace the 95%-confidence age with the remaining lifespan, by simply subtracting the male’s age from the entry in the table (which as mentioned before is referenced to the man’s age). This is shown in the table below.

When looking at any row in the table, there’s another interesting pattern. As we look at any given row – such as that for age 62 – this represents different couple scenarios in which the man is 62 but the woman is 15 years younger at the left to 15 years older at the right. Going from left to right along a row – such as that for age 62 – we see that the remaining lifespan decreases steadily by 1 year per step, but then levels out around the middle of the table and becomes constant. This represents the influence of first the female, and then the male, on the 95%-confidence lifespan. At the left, the female is significantly younger than the male, so the joint lifespan is more strongly influenced by the female’s age – she’s very likely to outlive him, so the 95%-confidence age really depends just on how long she alone will live. Toward the right, the female is older than the male, so the joint lifespan is most influenced by the length of time the man is expected to live. In the middle, there’s influence from both; the crossover occurs slightly to the right of the table, since women on average live a few years longer than men.

Similar tables can be created for same-sex couples – these are provided in the links below.

Male-Male Joint Lifespan Table – 95% Confidence

Female-Female Joint Lifespan Table – 95% Confidence

 

Conclusions

The above gives some guidance in how a retiree might pick an appropriate timespan for planning his/her retirement funding. In the simple case, for a man or woman alone who’s at or below the normal retirement age, the answer’s simple: plan to age 96 or 99 if you want to be 95% confident that you won’t outlive your assets. For a male/female couple who are close in age, plan to about age 100.

Of course, a timespan selected using this technique has an unsettling certainty as its central feature – the 95%-confidence age is one which 5% of retirees will outlive. Will you be one of these lucky folks? Well you won’t feel lucky if you are, but have just spent all your money. Obviously, planning to completely exhaust your funds on any specified timeline isn’t a good approach to retirement planning in any case. The above can be helpful for estimating timespans, but really needs to be coupled with some sort of scheme that can adapt both to the variations in economic conditions and the changing view of lifespan as a retiree ages – for example, the withdrawal scheme might be adjusted each year for a new timespan based on a recomputed 95%-confidence age. There are a number of adaptive schemes available that can adjust to make sure you don’t “run dry” even as your lifespan assumptions change.

Caveat

This information is presented as-is, with no guarantee as to accuracy or freedom from errors. This document is intended as an observation for informational purposes only, and should not be used in retirement planning  without cross-checking and correlating with other sources of information and consultation with a certified financial planner. I’m an enthusiast, not a professional, and being human make mistakes. Your retirement funding is far too important to rely significantly on any unvalidated information!

Resources

Social Security Administration Actuarial Life Table

Page with life tables used in this article

Spreadsheet with calculations and tables derived from the life table data from the Social Security Administration (OpenOffice / LibreOffice format, .ods)