How Long Will I Live? How Long Does Retirement Last? ⎜ Ep. 1512

Foreign. Welcome along to the Property Academy podcast. I'm your host, Edward Guy.

And I'm Andrew Nicholl.

And today's show we're talking about how long will I live? And how long does retirement last? Now, I tell you what, I've gone down an absolute rabbit hole because Andrew sent me an article which we've already recorded a podcast on about all of the different strategies to make your kiwi saver last in retirement. But then as I was reading that paper from the Society of Actuaries, and I still can't believe that's a thing, I need to find out how I could join. There was a whole heap of information about how long people live. And I know that this is a property podcast, but this is also a podcast about how you use property to live a really good life. And because we believe everyone should have a financial plan, part of that is figuring out, well, how long is my retirement going to last? Or how long does that financial plan need to last? Now we're gonna get into this. Stick with us. Cause it's very interesting. Andrew Nickel, how long do you think you'll live?

Are you gonna tell me how long I'm gonna live?

I'm gonna tell ya. But how long do you think?

Based on what? Have you looked at some statistics?

I've looked at all of the statistics.

I'm gonna go with 43.

You're not? No. Give me a serious answer, mate. You're grumpy this morning, aren't you?

I'm gonna go with 78.

Okay. Why do you think you're gonna live to 78?

Because you asked me to pick a number.

Yeah, yeah, but surely that's based on.

I don't know, just based on what I imagine people live to and then minusing a few years for my bad habits.

Okay, so what age do you think people live to these days?

80.

Okay. And do you think that'll be roughly what people your age will live to? About 80?

Nah, probably a bit longer for my.

What do you reckon, maybe 85? Yeah, maybe 85. Okay, well, let's dive into the details because we've actually got some data around this. Now I do want to say this is particularly important for anybody who's planning on using what we call the nest egg strategy. So that's where you build up your assets and then you gradually live off those in retirement. Because when you pick that strategy, you've got to estimate what date you are going to go up to St. Peter's Pearly Gates and pass through there. And in fact, you need to guess your age of death whenever you use any superannuation calculator, whether that's ours, whether that's sorted.org nz or whether that's someone else's. So. So this question of how long you're going to live really does have real world implications when you are planning your retirement. Now, Andrew, before we get into how long you're going to live, if someone wanted to know how long they were going to stay on earth for, what would people usually Google?

So probably life expectancy. So if you look at a child born today, the average life expectancy according to Google is 80 for a male. So if you're retiring at 65, that's 15 years in retirement. For females, because they do less dumb stuff, they live to 83.5, which is 18 and a half years in retirement. So it's easy to get this information off Google or even StatsNZ website.

So when you come back to what Andrew was saying, you might think, okay, here are kids. The average person might live to 80. And if you go onto StatsNZ, that's what it would seem to suggest. But what's actually interesting is it masks some really important differences. So if I look at Andrew's cohort, so people born in about 1981. So if you're about 42 right now. I know he's giving me a look.

Yeah, I'm not born in 1981 though.

Yes, but stat. Okay, all right, Statz. Release it in five year increments. That's what you're closest to. All right, so he's very upset. He's got to go get some more Botox down. So for those border 1981, and that would mean you're about 42 today, the most common age of death is 91. 91, yeah. So Andrew, you said, you know, maybe the average person might live to 80, might live to 85. The most common will be 91 is what StatsNZ thinks. And the median age of death for anybody who gets to retirement is 89, not around about 85 like you'd suggested. So that means that rather than say 15 years in retirement, which is what the life expectancy data suggests, the actual date of death is going to be closer to 89 for a man, which means 24 years in retirement, not 15. So you've got to plan for an extra nine years in retirement. My key message from today's podcast is you're probably going to live way longer than you think. And I'm going to get into why me or just everyone, People in general and I'll get into the reason why. That life expectancy figure from StatsNZ is not the right figure to use when you're planning for your retirement in a second. But Andrew, how does that impact what you need to do for retirement? Given that you're probably not going to live to 78, it's probably going to be closer to 88.

Well, I think the main thing is if you're going to use the nest egg strategy, you're going to have to have saved a lot more money than maybe you might have thought, because otherwise you're going to outlive your money. And that's not a good position to be in, especially because you might have medical bills as you get older. The other thing you could consider as well, maybe rather than use the nest egg strategy, maybe I want to use the golden goose strategy so I'm living off my returns rather than the actual erosion of my assets. And that way you end up, you know, having an income for life, whether you live to 88 or 1008.

And it's interesting that we're going through these numbers and Andrew thought he wouldn't live as long as he probably will because according to, I read a New Zealand study by someone who was doing their PhD and what they are saying is that most Kiwis underestimate how long they're going to live. So on average, men think they're going to live about five, five years less than they actually end up doing. Women tend to underestimate it by about seven years. And the impact of that or the bad things that could go wrong if you do underestimate how long you're going to live is that you could spend all of your money up front when you retire, which means maybe you're not left with as much as you get older. Now, Andrew, we're going to come back to how long each of us are going to live. But why do people underestimate how long they're going to live?

Well, I think the first thing is for a lot of us, we think about probably someone that's passed away and that's usually a grandparent. And so we think, oh, well, Nana Nickle lived to age 70, so that's what I'm going to use.

70 is quite.

No, I guess I took an absolute stab in the dark.

You don't know how?

No, she was 100 for as long as I knew her. So I have no idea how long Nana Nickel lived for, but I think she died relatively young.

Yeah. Well, even if I think about my grandparents, my grandfather probably Died around. I'm pretty sure it was 82. You know, my grandmother in her 70s. And so before I read all of these stats, I did think, oh, well, I'll probably live to 82. I had that life expectancy figure in my head as well that you often see quoted in the media around that kind of 80, 82. And I thought, yep, that's when I'm going to die. Now I'm thinking, oh, my God, I'm going to live to 89. I need to take up smoking, so it doesn't last that long.

Great retirement plan. Follow us for more retirement tips.

And I just do just want to talk to you about that life expectancy figure. So the life expectancy figure that you hear, you know, around about 80, is an average across somebody's life. But what you've got to remember is that about 5% of people die before 65. So unfortunately, about 1% of the population, or slightly under passes away before their first birthday. Really unfortunate. Really, really sad. And then people obviously die right up to 65, but that all of those people who unfortunately die before 65 pull down the average. So if you make it to 65, and there's a very good chance you're going to make it to 65, your life expectancy or how long you're actually gonna live will be longer than that 80 that we hear, or that 83 and a half for women. And the reason is because that average is being pulled back down by all the people who have unfortunately not made it to their 65th birthday. So you need to think about, okay, given that I live to 65, what's the average age I'm gonna live to? And for Andrew, we've already said the most common age of death will be 91. The median's gonna be closer to 88, 89. So that's what we've gotta think about. And before I dive into the stats, I'd never heard somebody actually talk about that. Those people who unfortunately die early do pull the average down. But if you've made it to 65, the fact that they have died isn't representative of how long you will live.

It's a really good consideration that I wouldn't have thought about.

Yeah, neither until we read the actuary report. We need to become actuaries. And the other issue with life expectancy is it ignores the fact that people keep living longer. So at the start of the 1900s, the chance that a female lived to 100 or over is about 1% from birth. So all the people living in 1900s, all these women being born, chance that they'd live to 100, about 1%. Andrew, your child was born in 2021, is that correct? I think I'm pretty sure it's correct. 2021, is that right?

Or 2022?

It was one of the two. Anyway, based on 2022, based on the latest stats, she's got a 14% chance of living to 100. 14%. Yeah. So her chance from birth, and in fact, it's slightly higher now because she's over 1. So the chance that she's going to live to 100 or older has gone from 1% to up to 14% in about 120 years. So. So the chance of living a really, really long life has gone up and continues to go up over time. So Andrew and I have got a graph in front of us. Since about 1911, it's pretty much been a straight line up. The chance that somebody is gonna live to over 100. And given that she's got some Humphreys genes in her, knowing, oh, she'll live forever, no, knowing her mum and grandmother, I'd expect that would probably be the case.

And so, Ed, how long are we gonna live for?

Okay, well, you and I are about the same, so. So the median age of death, assuming we get to 65, which is a. It's very high likelihood. Over 95% chance that both of us individually get to 65. Our median age is going to be 89. There is a 25% chance that you live longer than 93 and a 25% chance that I live past 94 as well.

We better keep saving.

Well, that's the thing. That's horrible. That is amazing. I didn't realize how. How much longer people are living.

My knee's hurting today. This is 50 years from now.

Yeah. And there's a good chance that, you know, we might not be a healthy 93, right?

No, it won't be.

We're gonna have some health conditions. But when you say, hey, there's a 1 in 4 chance that you're gonna hit 93 or 1 in 4 chance at 94. I keep telling people I expect to die on my 70s, but that's probably not coming to happen based on these stats. And it actually gets worse once we start thinking about our partners. So both Lauren and Angela have a median age of death of 92. Assuming that they hit 65 and they have a 25% chance of living to 96 or older.

96.

96 or older. I expect Lauren to hit at 100, 140.

Like her mother will.

Yeah, I expect that. No, I'm not. No, no, no. I've just got to. I've just got to get up and I've got to fix the dishes and then I've got to go do the camping. Lauren, it's 10:00pm at night. No, no, no. I'm just gonna do it. But what that made me think is I remember we did an episode about age gap couples and about how, especially guys or anybody who's a little bit older, you want to think about what happens when you pass on to your surviving partner. So I hate to get too morbid, Andrew, but assuming you hit 60, we're already there. But assuming you hit 65, you're gonna die in 2073. Lauren's media, 50 years from now. Yeah. Lauren's median year of death is 2092. She's going to live about 19 years longer than you. Why are you laughing?

She better make sure she can find another rich young man.

Mate, you can't say that on the.

Show because I'm spending up a storm between 2070 and 2073. I will be buying everything I can.

Okay? It's terrible, mate. And for me, I'm expected to die. I can't believe I'm going to have eight years without you, mate. It makes me very sad. Makes me very sad. I like how this is the part that's where.

Sad.

Quite sad. How am I going to do the podcast?

I'll warn you.

So I'm going to die in 2081. Angela, 2088. So she's going to live an extra seven years longer than me. And we haven't factored in things like ethnicity because she's Asian, she will probably live even longer than that. Asians tend to live an extra two or three years compared to other ethnicities. So she might have 10 years to herself.

She's counting down the days.

I'd expect. So. But the reason we mentioned this is I do think it's important for guys or even girls as well, depending on your situation. I often think about what happens to your surviving partner. And if they're alone for 19 years or 10 years, you know, you want to make sure they're going to be provided for. I remember an older person I knew. Her husband had died many years earlier. She was alone for, you know, 20 years. And so, you know, you need to think about things like, are they going to stay in the family home? Are they going to be able to afford to go into a nice retirement village? If that's what they're going to want to do. And I tell you what, by the time this podcast has been released, we will have already sent out more specific numbers on our website as part of Private Property Andrew's weekly newsletter. So if you want to see your numbers, head to our website, purposepartners.co.nz. because the important part of this is that if you just Google life expectancy, the stuff that comes up on StatsNZ, that is more representative of what age people are dying today as opposed to what age you will pass away. And of course, because people are living longer, you may find that you are going to live much longer than you actually think. So as part of that Private Property, we released all of the numbers. So you could plug in what your birth date is or check the date closest to your birth date and see what chance you have of a making it to 65 and then the chances of how long you're gonna live. And I know that probably sounds quite morbid, but actually some of you might be quite pleasantly surprised if you wanna stay on Earth for a good long time. Right, let's wrap it up there. But please don't forget to rate, review and subscribe to. The podcast really does help us get the message out to more people. And hey, if you've got a podcast topic that you want us to talk about, just send us a message on Instagram. We're OpusPartners. Thanks for listening to the Property Academy podcast. I'm your host, Sid McKnight.

And I'm Andrew Nicholl.

We're going to be back here tomorrow with even more daily strategies, tactics and insights to help you get the most out of the New Zealand property market. Until next time.