What Life Expectancy Means to Retirement Planning

The toughest question to answer when planning for retirement is, How long will I need the money? The truth is: no one knows for sure. If you have heard of life expectancy estimates but are not quite sure what they represent and what that means for your future, read on.

What Do You Expect?

Pension planners and insurance actuaries alike rely on life expectancy data to set rates and forecast payouts. Obviously, there is a need for a baseline. But, most people do not realize that life expectancy changes as you age.

For children born in 2002, the life expectancy for a male is 74.5; for a female it's 79.9.¹ Due to medical advances and lifestyle trends, these estimates have generally crept up a bit each year. Still, the way they are calculated is the same: These numbers are a median for the population's collective life span. In other words, 50% of people will die before they reach that age while 50% will live beyond it.

Interestingly, the longer you live, the longer you are expected to live. In fact, men who turned 61 in 2002 are expected to live to age 80; likewise, women are expected to reach 83.7. If a married couple both live to age 65, there is a 50% chance one of them will make it to 90. With those statistics in mind, it's clear that more people than you might expect will require retirement income that can stretch several decades into the future.

Here's to a Long Life

Fortunately, there are some financial instruments designed to provide retirees with guaranteed income for as long as they need it. The Lifetime Income Annuity from New York Life Insurance and Annuity Corporation (A Delaware Corp.), can help retirees plan confidently for a long and fruitful retirement. Using a lump sum premium, individuals or couples can purchase a Lifetime Income Annuity, which will provide them with a guaranteed² income that is not subject to market swings and cannot be outlived. Even if your retirement lasts 30 or 40 years, your Lifetime Income Annuity payments can be relied upon to be there, no matter what.

Various features can be added to your annuity contract at purchase, including an Annual Increase Option³, which helps combat inflation, and a Cash Refund option that will return to your heirs the difference between your initial premium and any payments already received if you should die prematurely.

This educational third-party article is being provided as a courtesy by New York Life Insurance Company. For more information on this topic, contact me.

¹ Annuity 2000 Basic Mortality Table

² Guarantee is backed by the claims paying ability of the issuer.

³ The policy owner must elect this option at the time of purchase and be at least age 59 ½ at the time of the first income payment. If you elect this option, you choose to have your income to start lower, but your payments will increase each year by 1% to 5%, depending on the percentage you choose. By structuring your payments this way, you may help neutralize the impact of inflation as your living expenses increase over time. Annual Increase Option is not available with either the changing needs option or the Income Enhancement Option.

00398439CV