HealthView Services report highlights actuarial longevity for
retirees based on health conditions, the probability of living to
95, and why health-based longevity expectations should be the
starting point for planning
DANVERS,
Mass., May 14, 2024 /PRNewswire/ -- Planning for
clients to live to age 95 has become a little questioned industry
rule of thumb. With 95% of Americans older than 60 having at least
one chronic condition, HealthView Services' new report shows
average actuarial life expectancy for those with common health
conditions is significantly lower. For those with diabetes, the
probability of reaching age 95 is less than 1%. Even the healthiest
5% of retirees only have a one-in-five chance of reaching this
age.
The new report, "Retirement Planning, Longevity & Health:
Does it Make Sense to Plan to 95?", provides health-based actuarial
data that draws on 266 million cases to reveal average life
expectancy for healthy 65-year-old retirees, those with high
cholesterol, high blood pressure, cancer, diabetes and obesity, as
well as tobacco users. It also highlights actuarial probabilities
that clients with a range of conditions will reach this
benchmark.
"The starting point for building longevity into retirement plans
should be actuarial data based on health condition," said
Ron Mastrogiovanni, CEO of
HealthView Services. "It provides a foundation for clients and
advisors to choose the life expectancy they incorporate into
planning tools to address longevity risk, and helps set realistic
retirement horizons for the vast majority of individuals over age
60 with chronic conditions."
The report highlights the financial impact for clients of
planning to age 95 versus beginning the discussion using actuarial
longevity based on health conditions. A 65-year-old man who has
reached his Income Replacement Ratio (IRR) goal based on age 95,
but after being diagnosed with high cholesterol changes his
longevity expectation to 86, would potentially be able to spend an
additional $447,000 in
retirement.
In a case study, the report shows that a 55-year-old woman who
has diabetes and is aiming to meet her IRR savings goal based on
her actuarial longevity would not require the same level of savings
as her healthy counterpart, who is expected to live significantly
longer.
"Our experience shows that incorporating longevity data that
clients find credible into the planning process is most likely to
drive savings and spending behaviors," added Mastrogiovanni.
"Importantly, it provides a basis for conversations, planning
decisions, and product choices to meet needs in retirement."
The paper notes that for clients of all ages, longevity is one
among a number of considerations that need to be taken into account
in the planning process. The needs of a surviving spouse, ensuring
funds are available for long-term care, the desire to leave a
legacy, along with longevity risk all need to be part of the
conversation.
"Using actuarial longevity versus age 95 as a planning goal is
not a zero-sum game," added Mastrogiovanni. "Since clients have
different risk appetites, levels of wealth, and sources of
retirement income including Social Security, using health-based
actuarial life expectancy for planning provides a way to
dynamically balance the goals of living life to the fullest and
managing longevity risk."
HealthView Services (http://www.hvsfinancial.com) is a leading
provider of retirement healthcare cost data, Social Security
optimization, and long-term care retirement planning and portfolio
management tools for the financial services industry that include
health-based longevity expectations. The firm provides an array of
planning apps, from 401(k)-focused to advisor-facing, all with the
goal of creating funding solutions to cover future in-retirement
health care expenses.
Contact:
Simon Erskine Locke
Islay Communications, Inc.
Tel: 917-359-6969
377654@email4pr.com
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SOURCE HealthView Services