Monday, June 15, 2015

Life Expectancy and the Age Pension

I recently read another article incorrectly suggesting that the “you would be expected to live until 84”.

Excuse us for being a little morbid and even pessimistic when we talk about dying.

Approximately 22% of Australian males die before they turn age pension age. For women it is approx. 15%. Ref: AIHWhttp://www.aihw.gov.au/deaths/age-at-death/

Your life expectancy changes as you get older because as you survive birth, childhood and adolescence, the chance of reaching an older age increases. Life expectancy at different ages can be presented as the number of additional years a person can expect to live, or, their expected age at death in years.

For example the life expectancy of men at birth is currently 80.1, at age 45 it is 81.8 and at 65 years old life expectancy is 84.2. Ref : AIHW http://www.aihw.gov.au/deaths/life-expectancy/#content

This is not an average. It not not saying that 50% of males are over the age of - say - 84. It is more like if you were a male and 65 years old then there is a 50% chance of you dying before you turn 84.

So being pessimistic there is a 50% chance you will not need any super/pension at the age of 84. But fund managers and others don’t want you thinking like that.

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