Retirement finances - and longevity:

I have always thought that you need to be an actuary to figure out your projected longevity. Turns out I was wrong! Let me explain - but first some background.

FundAlarm is one of my favourite web sites regarding investing in mutual funds in the US. It dishes out dirt about mutual funds that you would be hard pressed to find elsewhere. Roy Weitz does a fantastic job of collating all of this information and puts out a monthly commentary that makes for the most interesting reading I get with regard to mutual funds.

Enough of that. I saw the following post in this month's highlights (it should be available here after December 2004). and decided that it is most definitely worth reproducing here.

When you're planning your retirement finances, one of the toughest tasks is figuring out when you're supposed to die (sometimes euphemistically referred to as your "planning horizon") .....If you plan for a relatively short life during retirement, and you live longer than expected, you could run out of money.....If you plan for a long life, and it doesn't work out that way, you may end up denying yourself experiences that you won't get a second chance to enjoy.....Traditionally, coming up with a life expectancy for retirement planning has been a seat-of-the-pants activity: You considered how long your parents and relatives lived, you consulted some life-expectancy tables, you plugged the resulting life expectancy into the retirement calculator, and you hoped for the best.....Now, several free Web sites offer a more systematic approach to life- expectancy planning.....If you need to come up with a life expectancy number, or you're just morbidly curious, you might want to take a look at them:

• Northwestern Mutual Life Insurance Co. sponsors the Longevity Game, which the company says uses "the most current information gathered by the life insurance industry, public health organizations, and scientific studies" to help determine your life expectancy. I'm not sure how they do all of this with just 13 questions, but it looks like I'll be working on FundAlarm for a long, long time: The Longevity Game gave me a life expectancy of 94 years. [www.nmfn.com/tn/learnctr-lifeevents-longevity; if you have a pop-up blocker installed, you may have to temporarily disable it]
  
  
• The Minnesota State Retirement System offers a life expectancy calculator with 29 factors, and perhaps a slight Minnesota/midwestern bias: You gain extra life expectancy for having a graduate or professional degree, but you lose life expectancy for earning more than $60,000 a year. (It looks like the folks in Minnesota want you to get a good education, but they don't want you to get too fancy with it.) Unlike the other calculators, which operate automatically, this one makes you crunch your own (simple) numbers. It gave me a life expectancy of 79 years. [www.msrs.state.mn.us/info/Age_Cal.htmls]
  
  
• Microsoft's Money Web site asks about 30 questions, and it gave me a life expectancy of 91 years. It also politely noted my "ideal" weight for "maximum longevity" (I need to lose two pounds), and it said that one of the three biggest factors working against longevity is my "personality type." Unfortunately, this is something I already know, and have given up trying to change. [moneycentral.msn.com/investor/calcs/n_expect/main.asp
  
  
• The calculator at livingto100.com is based on a centenarian study at the Boston University Medical School. This questionnaire asks the most questions, as well as the most detailed questions. It also produced by far the most useful feedback, as well as some interesting recommendations. (For example, did you know that regular flossing can reduce the risk of heart attack?) This site gave me a life expectancy of 81.2 years, and that decimal makes it seem way too accurate. [http://livingto100.com/quiz.cfm]

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