Until 100 years ago, retirement was a utopian future. Average life expectancy worldwide when you got born was around 35. Antibiotics &vaccines increased it to 50 by 1960.  However, planning for retirement was not keeping our grandparents up at night yet. Fast-forward to 2017, thanks to the advance in public health and industrialization the average life expectancy worldwide reached a whopping 72 (range is 50 to 89).

In this corner of the planet, let’s call it Confusion Land, average life expectancy at birth is 75 (right in the middle of the list) and the lucky John who reaches 65 (and gets to retire) can expect to live on for up to 15 more years, give or take. So that’s your start number: 15 – the number of retired years. If you’re a woman, you will retire 3 years earlier and also, by choice of natural selection, you will live 5 years longer than your Adam.

By rule of thumb, you can determine how long you will probably live by simply taking the oldest relative alive that you know and add 5 more years. No, it’s not me being optimistic; it’s about the further public health advance ahead that will increase your life expectancy going forward. By 2040, average John born in Confusion Land is expected to roam on this planet until he’s 82.

So now, if you’re lucky like me and you contemplate to the possibility to pass the 100 hurdle (thank you, great-grandmother!), that means almost 35 years to be spent in retirement. I have barely been around for the same amount of time, so that really helps one put things into perspective.

The experts say that 30 is the right number – it’s the safe assumption to prepare for retirement in the 21^st century. Trust the experts. They use complicated models to calculate the common sense. If you can’t remember 30, just think about the number of years it takes you to pay off your mortgage. Apparently, 30 is some sort of mantic number in finance.

August 1, 2019August 8, 2019