King James Version (KJV)
10 The days of our years are threescore years and ten; and if by reason of strength they be fourscore years, yet is their strength labour and sorrow; for it is soon cut off, and we fly away
In Biblical days 70 was considered to be mankind’s allotted span on earth. Beyond this, the seriously old faced such a decline in the quality of life that further survival was not to be welcomed.
Obviously this was not the life expectancy. It would have been very much lower than 70. Many would have perished in infancy and childhood from obstetrical complications and infections. It was simply an observation as to when those who survived through to old age could expect to pass away.
Today there are very detailed statistics kept by the Australian Bureau of Statistics (ABS) and by the Australian Institute of Health and Welfare (AIHW) for whom correct and detailed information is vital for planning welfare payments, and providing appropriate health care services.
Another government department with a vital interest in life expectancy data is the Australian Government Actuary (AGA). The work of an actuary is to calculate, analyse and to manage risk. The AGA provides advice to government on issues involving the public service such as superannuation, compensation and long service leave.
However its services are available to the public. Uniquely among government departments, it is fully self-funded, by providing fee for service actuarial consultancy to many private and public business enterprises particularly insurance companies.
For ordinary Australians wishing to plan for their own retirement life expectancy figures are important, but it is not always easy to find the information which is most up-to-date, and personalized to your situation.
The two most important questions in planning for retirement are:
- How long will I live from birth? How likely is it that I will reach retirement age?
- At 65, how long can I expect to live in retirement? Will my superannuation last this long?
- Your life expectancy
Knowing that the average life expectancy from birth for males is now about 79 and for females 84 is helpful to a point.
It suggests that if you retire at 65 you would need to live for 14 years on your savings, but that your wife would need funding for a further 5 years.
Much more helpful would be to know long you individually could expect to live. This obviously depends on your health and way of life.
This is where actuarial advice would be helpful. AGA would be a trifle too expensive, but I have come across the blog site for Dean P Foster, of the Department of Statistics at Wharton University of Pennsylvania. He has a free online calculator that will enable you to estimate your own life expectancy. Input your personal statistics, and health data, and it will calculate a figure for you.
If your life expectancy is less than 65 there is little point in saving extra for a retirement you may never enjoy.
The Pension Safety Net
The failure of many to even reach retirement has helped government meet their budget allocation for pensions. With better health and medical care, many more are now reaching retirement, and then living longer at tax-payers’ cost. The problem is compounded by a projected decline in the number of people of working age to each aged pensioner. It thought that there will be only 2.7 workers per pensioner by 2050. By then about a quarter of Australians will be over 65.
The Aged Pension is a safety net for those unable to save enough for their own retirement. The single rate is set to at least 25% of male total average weekly earnings. At present the age of eligibility is 65 for men and 64 for women, but will increase in six month increments to 67 between 2017 and 2023.
It remains to be seen however to what extent it will be possible for somewhat frail ageing Australians to stay within the work-force given the need of industry to get maximum productivity from their workers.
- Sizing Up the Big Question: How Much Money Do You Need To Retire? (business.time.com)