I have a 15% chance of living to be 100. Check out the chart here.
I have a 30% chance of living to be 90. Check out another one here.
And I have a 50% chance of living to be 80.
Is it possible to budget for such an undetermined future. When you were 20 years old and you were deciding what you wanted to do with your life, would it have been possible to predict 25 years into the future. Or 30 years. With all the changes that happen in the years from age 20 to age 50, it is virtually impossible to plan for all the possible outcomes with the hope of being prepared for what is to come. During those years, we get married, have children, change and lose jobs, we experience health challenges and accidents, and life and death. And we roll with whatever comes our way while making plans in the best way we can manage.
So why is it, that as we go into our retirement years, we are charged with the responsibility to be fully planned for the next 40 years. In these years we will experience life and death and health issues and accidents, change our residence, potentially change jobs and travel. All equally as unpredictable as the possibility of predicting our years from age 20-50.
But retirement planning requires that we do so. In financial ways and lifestyle ways. Potentially it is because our earning power and our concomitant ability to care for ourselves is lower. Perhaps it is because our health issues are more frequent and more costly.
Still, we cannot plan for a future that is 40 years in the future. We can apply broad brush strokes to the possibilities and then get down to the business of living in the world we are in now. Is it prudent to sacrifice these years for a future to which I have a 15% chance to be a part of.
We are gambling on financing a lifestyle into our nineties and postponing doing the things we wish to do in our now. It seems there is a little lunacy in the decision to continue working at something you dislike, that absorbs all your energy, so you can fund a lifestyle that reaches into your potentially, non-existent nineties. And with a 10-30% chance of that life that you have funded happening….it seems incredible that a massive investment community has convinced us to give up our precious present to fund this obscure future.
It is a trade-off to depart the work force now, when the rest of your peers are working and potentially run short of money when you are 92 years old. If I happen to live to be 92. I am gambling more on now rather than later. It does not mean that I have left myself without, into my nineties, but rather that I am balancing my budget with those odds and assuming that by 90, I will no longer be part of the huge machine of consumption. I am counting on that life will be simpler then and will cost less as well. I have indexed my retirement funds to offset inflation as well.
It is a balancing act and we all make our choices based on the level of risk we can live with. But too often, I think, we mortgage our now for a thin possibility of a later. Our health is a major determinant of our ability to enjoy our later years. Manulife has a calculator on their site that allows you to calculate your odds of dying or becoming critically ill or disabled by age 65. It is based on gender, age and whether or not you smoke. I think it should include exercise as well. If you are 40 now, those odds of being critically ill or disabled are 41% by the time you are 65.
I remain hopelessly optimistic of my own chances, but these calculators are based on historical incidence of disease and as some prognoses get better, others get worse. We have been so able and well and capable of anything and these diseases have always been something that happens to older people. We boomers are, or have been, invincible in our ability to solve anything that comes our way. And we work out and eat right and supplement and we hope it is enough. But it may not be.
So we gamble our quality of now for a debatable later. I am just saying….
Thanks to Alvimann at Morgue file for the freephoto.