Although the number you’ve got in your current retirement nest egg is looking pretty solid, new research by the Actuaries Institute suggests that rapidly increasing lifespans means that age 100 should be the new target for retirees.
Currently life expectancy tables used by many financial planners use 87 for women, but the Actuaries Institute says that people should consider “how much this will increase between now and the time someone retiring today reaches their 80s or 90s”.
“A healthy, well-educated female entering retirement today, who had an affluent career and enjoys a good quality of housing, is just as likely to live beyond age 100 as she is to die before age 80,” it says.
Actuary Jim Hennington, author of the research note and a member of the Actuaries Institute Retirement Incomes Working Group, says that there is an uncertainty as to how long today’s retirees would live.
“Everyone wants to make sure their savings last,” he said to news.com.au.
“Fifty per cent of us live longer than our life expectancy. Some live all the way to age 105 and beyond.
“A couple of average health aged 65 and 62 need a plan that lasts until the male is 100 in order that they can be 80 per cent sure their financial plan meets their potential lifespan.”
Planning for Prosperity adviser Bob Budreika agreed with the note.
“When you say 100 to people they laugh and say ‘nobody in my family has reached that’,” he said.
Ideally, you would have enough cash reserves to last you until 100, but if you don’t have this saved up, there are options available including the pension.
“It’s not all doom and gloom,” Mr Budreika said.