Many people may underestimate just how long they could live for in retirement. And yet that difficult, and sometimes sensitive, question is at the heart of many of the current discussions around pensions, annuities and retirement income solutions.
Planning your retirement income is very tricky – your client may have no idea how long they will be around for or how long their retirement income needs to last. That's where our calculator can help.
Using the tool
This calculator helps give an indication of the chances of living to certain ages. It is based on UK Pensions Industry Data* and your own assessment of your general health.
You may want to explain to your client that:
Excellent health - you're feeling pretty good and you can't remember the last time you went to the doctors! Your height and weight are fine, and you don’t take any tablets for any longer-term health conditions.
Reasonable Health – you're feeling okay health wise but you could feel better. For example you have managed to give up smoking, but you take tablets for high cholesterol and blood pressure.
Challenging – your health is struggling. For example you are a smoker, and although you take tablets for high blood pressure and cholesterol, it is the more serious condition such as Parkinsons that is impacting on your activities of daily living.
Critical Health – you're suffering from a serious medical condition such as cancer, and undergoing treatment for it. You find it difficult to get about, and possibly need assistance with day to day activities.
*The Continuous Mortality Investigation (2015).
You can find out more about the Longevity Calculator by contacting us.
Once your client has a better understanding of what age they may live to, and how long their funds may need to last, they can start to consider the decisions they make in retirement. For example, they may prefer to have a part of their income guaranteed, so that they have peace of mind that minimum expenses and costs are likely to be covered. Or it might be that they want to include protection against escalating costs or inflation if they are likely to live for many more years.