The longer you live, the longer you live. So plan for a long life. Those who are older have longer life expectancy than younger people because they have survived their early years. This is just one reason why you need to plan for a long life. This slide shows the probabilities of someone who's 65 today living to various ages.
Six out of ten 65 year-old men will live to age 80 or longer as will seven out of ten 65 year-old women. It's an important factor in marital status when determining your investment time horizon because the likelihood that at least one member of a married couple will live to various ages is higher than the odds of a single individual. As a result, there's almost a 50/50 chance that one member of a married couple will live to age 90 or longer.
Additionally life expectancies continue to increase. As you see in the table insert labeled "Average Life Expectancy at age 65" shows the life expectancy increase both for men and women between 1990 and 2096. A 65 year-old woman will gain 5.5 years and 65 year-old man will gain 7.6 years by the time the millennium's are well into retirement. The gap between men and women is also narrowing.
Many individuals may not know their current odds of a long life or the rate like expectancy is increasing because they failed to take new medical technology into account. In fact, 6 out of 10 individuals underestimate their life expectancy. 4 out of 10 under-estimate by more than 5 years. Therefore, it is important to prepare for the possibility of a long retirement. Over time, purchasing power will erode due to inflation making it critical to maintain a portfolio which can outpace inflation. It is also important to make wise choices related to social security.
Finally, understand that a family history of early demise may not play the same role it has historically. Medical science is improving at an exponential rate making it is especially important to use an even longer time when planning.
Chart: Social Security Administration, Period Life Table 2014 (published 2017), JPMorgan Asset Management,
Table: Social Security Administration 2017 OASDI Trustees Report