Planning Your Future – Actuarily Speaking

Planning Your Future – Actuarily Speaking

Recently, I have been studying a course that featured a discussion on the probability of how long people, within a group, can expect to live.  Often these conversations are misconstrued as to when a person will pass away which, if taken seriously, may result in bad decisions being made.

Life expectancy depends on many factors, including gender, income, diet, geography, and general health to name but four issues that can impact longevity.*  No one knows how long any specific person will live, but if you have a large enough group, patterns will emerge.

According to the Canadian Mortality rates, published in the “Canadian Pensioners” Mortality 2014 table with improvement to 2023” show the following:

Of 1,000 women living at age 65, we can expect 929 still living 10 years later. 

By age 90, more than half are still alive.

The last survivor is expected to die between 109 and 115.

Of 1,000 men living at age 65, we can expect 918 can expect to still be around at age 75.

By age 89, just over 500 men will still be alive.

The last survivor is expected to pass away between 108 and 110.

So, what does this mean?  When we compare these current mortality rates with those when the present Canadian system was first created, Canadian men and women are now living much longer.  Consider this:  most people enter the work force between 20 and 30.  If they retire at the present standard age of 65, it is highly probable that Canadians will spend more time consuming their investments and savings rather than accumulating wealth.   That is a recipe for becoming poor when one’s health becomes most fragile.

In conclusion, my recommendation is for people to challenge the concept that retirement will be the “golden years”.  As a self-employed person, I am presently retraining myself to continue being valuable in the marketplace.  I will be announcing my new specialty in the weeks to come.  Stay tuned!

*Frank Vettese, Special to The Globe and Mail 13-03-2023 and 15-03-2023.

*Ed Burrows, FCA, President of Pension Valuators of Canada, Video Lecture on Basics of Pension Division for the Chartered Financial Divorce Specialist Designation course, January 2023.