How Long Will You Live? Part III
The Official Estimate … and a Grain of Salt
By Allen J. Davis, CFP® ChFC
This article is the third in a series that can help you pressure-test your assumptions and estimate your own life expectancy in a more informed way.
In my first article, I talked about some of the reasons people avoid thinking about their own life expectancy. In a second piece, I discussed people’s tendency to overestimate or underestimate their own longevity by five years or more.
This third installment, based on data from the National Center for Health Statistics of the U.S. Centers for Disease Control and Prevention (commonly referred to as the CDC), will give you the federal government’s projections. It’s also possible to get a more personalized estimate of how long you’ll live. Mary Young describes her experience using a variety of longevity calculators that you, too, can try out.
Life Expectancy in America
You don’t have to be an actuarial wonk to find the CDC’s longevity insights quite interesting. Click here to see a fairly simple table that presents life-expectancy at birth, age 65, and age 75, with comparisons based on gender, race, and Hispanic origin. (If you want to read the report these tables come from, you can do so here.)
The CDC calculates life expectancy in several ways:
Life expectancy at birth essentially tells us, “Looking at every American living at this particular time (2018), what’s the average age at which they’ll die?” Based on the CDC’s table, the answer is 78.7 years. (By comparison, it was just 47.3 years in 1900 and 69.7 years in 1960.)
This average is useful, in part because it enables us to compare longevity trends over time and between different populations (by race, gender, for example, or in comparison to other countries). But it’s less useful if you’re looking for a ballpark estimate for yourself. This average age of mortality includes everyone alive in 2018, including those who will die younger than expected, for example, SIDS fatalities, teenage car accident victims, young adults who overdose, and middle-aged adults who succumb to cancer.
But if you are currently age 67, the life expectancy of people who have lived at least as long as you have is much more relevant than the average for the entire population. Happily, the CDC also estimates life expectancy looking only at those who are age 65 or older, as well as those age 75-plus.
Differences Based on Sex, Race, and Hispanic Origin
For all three populations—the U.S. as a whole, people age 65+, and those 75+—the CDC also estimates longevity based on sex, race, and Hispanic origin. A male who is over age 67, for example, will live, on average, for 18.1 more years, i.e., until he’s 85.1 years old. An age-67 female, on the other hand, still has an average of 20.7 more years of life. Women have lived longer than men consistently since 1900 (the earliest date in this table).
Racial disparities are glaring and, in some cases, surprising. Whites of both sexes, age 65-plus, will live roughly two years longer than their Black or African-American peers. The CDC also compares life expectancy based on Hispanic origin. The average life expectancy at birth for all Hispanics is 81.8 years, three years longer than for White nonHispanics (78.6 years) and seven years longer than for Blacks who are not Hispanic 74.7). The “Hispanic Paradox,” as demographers call it, may be explained, in part, by the dynamics of immigration. Hispanics who come to the U.S. and remain tend to have above-average health, while those who eventually return to their home country tend to be older and have poorer health. 1
The data underlying all of these estimates are, as is always the case, imperfect. Yet the tables can still help refine your ideas about how long you’ll live. Having data will also counter the avoidance response to contemplating your own death.
Many more factors besides age, gender, race and Hispanic heritage influence estimated life expectancy. Mary Young has just posted an article about self-assessment tools you can use to customize your life-expectancy estimate by including demographic, health, and lifestyle factors.
Making Expected Longevity Part of Your Financial Planning
As financial planners, part of our job is to help clients think about longevity early in our working relationship and then revisit the question as you get older, based on informed and realistic assumptions. We’ll develop a strategy, tailored to you and your situation, for optimizing cash flow, mitigating risk and tax liabilities, managing your investments, and planning your estate. A client once asked me (with a wink) to guarantee him eternal life. I did so and, happily, he’s still alive. Yet few of us seriously aspire to live forever. So, here’s to the many blessings of the finite nature of life! (For a great meditation on the subject, see Dara Horn’s latest novel, Eternal Life.)
How Long Will You Live Part I & Part II
1 Paola Scommegna, “New Studies Link U.S. Hispanics’ Longer Life Expectancy to Migration Patterns, Less Smoking.” PRB, September 12, 2017.
Securities and investment advisory services and financial planning services offered through qualified registered representatives of MML Investor Services, LLC, member SIPC, Supervisory office: 300 Whitney Avenue, Suite 600, Holyoke, MA, 01040, Tel: 413-539-2000. The Davis Financial Group, LLC is not a subsidiary or affiliate of MML Investors Services, LLC.