Life lengths have been changing rapidly. Back in 1970,the average Aussie life expectancy was 71 years. Today,the average life expectancy is 83. If you are approaching midlife and retirement in good health today,that’s likely to improve significantly. But how much longer is the question we all want to answer.
Life expectancies are changing rapidly,with 42-year-olds today possibly living until 99.iStock
There are some big things to think about when you consider your life length,and use it to set goals and plans for your life ahead. Firstly,which type of life expectancy data will you use to project how long you might live? Secondly,are you likely to live longer than 50 per cent of the population?
The most common numbers we see on life expectancy are those from the Australian Bureau of Statistics’ Life Tables,based on historical data. They tell us the average age people are expected to live based on past experience in the population.
These numbers are interesting,and heavily quoted by the retirement industry,but the reality is,they don’t consider future changes in health and wellbeing,and they don’t consider whether you’ll be one of the lucky ones.
The ABS Life Tables historical data tells us that a 65-year-old man today might live to the age of 85.2 and a woman to about 88.
We need to plan for a longer retirement,both financially and functionally.
As a nation,our health is improving quickly. So,there’s better data to look at if you want to understand how your own life might turn out,particularly if you’re healthier and/or wealthier than average today.
There’s also data publicly available that is adjusted for mortality improvements,that is,they are adjusted to take in potential improvements to our health and wellbeing,given the upward trends in age-of-death rates in the past 25 years.
These numbers are much more interesting and probably much closer to the reality we will see,but still based on historical data. The numbers that follow are based on Australian Life Tables 2015-17,with 25-year mortality improvement factors – published by the Australian Government Actuary.
For a 65-year-old today,this data predicts a median life expectancy of about 88 for men and 90 for women. If you’re part of a couple,it predicts that one of you could live to about 94.
Considering the 25-year mortality improvements,the median life expectancy for a 42-year-old Australian today who is assumed to reach the milestone age of 65 is now about 91 for men and 92 for women. Additionally,if you are part of a couple,one of you could expect to live to 95.
Note,we’re talking medians — the mid-point. Fifty per cent of people will live longer than you and 50 per cent will live less.
So how do you take that into consideration in your planning? If you’re healthy,you might want to plan that you’ll reach the life expectancy calculation for the 75th percentile rather than the median. Or,betting on your one-in-four chance of living longer than others the same age.
And on that basis,the calculations say that 25 per cent of people aged 65 today might live beyond 94 for men,95 for women,and 97 if part of a couple.
This represents a difference of nine years for men and seven years for women over the historical median for today’s 65-year-olds. It’s quite astonishing to think about,really. What’s surprising is that no one seems to talk about it.
To provide even greater perspective,I had actuaries estimate an adjusted life expectancy for a 42-year-old Australian today in the 75th percentile. These numbers become valid only if the person reaches the milestone age of 65.
Assuming they do,one in four 42-year-olds could have a life expectancy of about 96,with both men and women sharing this target. Additionally,those who are coupled might expect to live until about 99.
This represents a difference of 13 years on the life expectancy we’re all seeing today. And,that will surely improve with time,too.
So what does that mean for retirement planning? It means we need to plan for a longer retirement,both financially and functionally. We need to think about how we can improve our quality of life,looking after our health,mobility,mental health and wellbeing,relationships and social engagement,in addition to building a financial plan that can cope.
And,we must consider what our life might look like if we live longer than we ever contemplated – and get the real chance to have an epic retirement.
Bec Wilson is the author of the bestseller,How to Have an Epic Retirement. She writes a weekly newsletter at and she is the host of the podcast.
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