Tuesday, June 26, 2007

Retirement Planning and Life Expectancy

Retirement Planning and Life Expectancy

No retirement planning book would be complete without a look at life expectancy. Trying to determine how long you might live, whether you will outlive your money and exactly how much money will be needed should you break all-time length of life records affects every plan.

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In the book, I point to the work done by Wharton School of Business professors Dean P Foster, whose field is statistics and Lyle Unger, an expert in Genomics and computational biology. Their work on longevity based on how much walking one does was expanded into a full fledged calculator with the addition of Chua Choon Tze, who brought his finance background from the Lee Kong Chian School in Singapore.

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The calculator was expanded to include numerous diseases and charts that will narrow your possibilities by ranking you among your peer group.

Included are references to fitness using a maximal treadmill exercise test as a measure of fitness with an initial speed set at 3.3mph, 0% grade for 1st minute, 2% grade for 2nd minute, an increase of 1% for each subsequent minute until 25 minutes thereafter, the speed is increased by 0.2mph each minute until test is terminated

To do this of course, you would need to compare what you think the maximum amount of time that you can stay on the treadmill with mean time for men of 16 minutes 52 seconds and a mean time for women of 11 minutes 28 seconds.

They also asked the user to judge their diet (Dairy, Meat, Grain, Fruit, Vegetable) and their stress level. The following list would have a negative effect on your overall life span:

  • Serious Illness in a family member (excluding death)

  • Serious concern about a family member (excluding illness)

  • Death of a family member

  • Divorce or separation

  • Forced to move house

  • Forced to change job

  • Been made redundant

  • Feelings of insecurity at work

  • Serious financial trouble

  • Been legally prosecuted

More fun can be had at NW Mutual's longevity game. As you input the information, your body changes shape and often not for the better. Starting out at the average life expectancy of 74, each question prompts an increase or a decrease in that anticipated age.

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There is much more to creating enough wealth to weather a long lifetime. And these calculators and games only hope to illustrate the changes you can make to achieve a longer healthier life. My job is to help you get the money you need.