If you ever played The Oregon Trail, you’ll already know it was usually one of the children that died of a snake bite or from dysentery. Just like in the Old West, once you make it through childhood, you have a greater chance of living into old age. In 2011, the average life expectancy for a newborn in the United States was 78.5 years. The average life expectancy for a 20-year-old in 2011 was 79.3 years, and the average life expectancy for a 67-year-old was 84.4 years.
What’s really amazing about these statistics is that the 67-year-old would have been born in 1948, when the average life expectancy for a newborn was 67.3 years. Every year that you’re alive increases the odds that you’ll die at a later age. We saw that a 67-year-old has 50% chance of making it to 84.4 years, but if he or she makes it to 84, they then have an average life expectancy of 90.8! And if they make it to 90.8, there is a 50% chance they’ll make it to 94, and a 94-year-old has a 50% chance of making it to 97…when does this end you might ask? Once you make it to age 113!
It’s interesting to note that the average life expectancy for someone who is 67 today is 19 years longer than it was when they were born. And while obesity is taking its toll on average lifespans, imagine if in another 8 decades the average lifespan of an 80-year-old mirrors the past and the average expectancy increases by 19 more years.
It might sound like common sense when you stop and think that the older you are, the longer you’ll live, but most people don’t think this way. We think of each birthday as another year crossed off of our time here on Earth. In reality, each year you’re alive it’s more like you add additional time instead of subtracting it. The chart below, based on the 2011 data from the Social Security Administration, shows what age you have a 50% chance of living to based on your current age. The trend to recognize is the older you are, the older you’ll likely be when you die.
The big problem here is that not many people plan their retirements around the fact that just making it to retirement means you’re more likely to have a long retirement. The actuarial tables show at age 67 you have an average of 17 years in retirement, but you’re setting yourself up for failure if you plan to only fund a 17 year retirement, especially if you’re not single.
Add a spouse into the mix and the odds of at least one person living to 80 increases greatly. A straight couple where both are age 67 have a 50% chance of at least one person living another 23 years. Two women have a 50% chance of at least one living another 24 years, and two guys another 21 years. Ten years later, at age 77, the two guys have a 50% chance of at least one living until age 90, the women a 50% chance of making it to age 92, and a man and women a 50% chance of at least one making it to 91.
If you want to play around with the numbers yourself, the Society of Actuaries has a better tool than I could create, but it isn’t using the latest available data from the Social Security Administration, so I’ve updated it with the data available from 2011. You can download a copy here.
The important message here is erase the mindset that you’ll die early or work forever. That you’re alive and reading this means you are more likely to be alive to see retirement age. Even if you plan to work into your 70s, realize you will have a 50% chance of living 11 more years.