Life should be like , or death. Actuaries can tell you when you are likely to die (Sicilian actuaries will tell you the day).
My friend Mark Rowlinson has produced a death predictor, that allows you to work out how long you’ve left on the planet unless you do something stupid like giving up booze and fags (coffin dodging) or step under a London Bus (fast-track to Hades).
If you fancy having a go, you can press the link at the end of the blog- no cheating- you’ve got to read the bit in the middle.
The bit in the middle
Thanks for reading the bit in the middle- you can go and play with Mark’s death predictor or you can read the remaining three hundred words.
My occasional correspondent Per Andelius , has sent me an interesting paper from America,
HOW DO SUBJECTIVE LONGEVITY EXPECTATIONS INFLUENCE RETIREMENT PLANS?
I don’t suppose it’s the kind of question that you’ll be asked when you rock up for your Guidance session but anyone interested in how people take decisions on protecting themselves from the impact of living too long, should take some note.
The estimates in this paper suggest a large and statistically significant relationship between subjective life expectancy and retirement expectations: an individual who is one standard deviation more optimistic about living to age 75 has a greater probability of planning to work full time at 62 and 65 by 10 percent to 21 percent, respectively.
Respondents who are more optimistic about their survival to age 75 or 85 also expect to work five months longer on average.
We also find that increases over time in subjective life expectancy for a given individual are associated with increases in his planned retirement ages and expectations of working at older ages.
Finally, actual retirement behavior also increases with subjective life expectancy, but the relationship is somewhat weaker.
The results further our understanding of how survival and retirement expectations are “anchored” to the previous generation’s experience and suggest how targeted efforts at increasing knowledge about rising life expectancy may increase the proportion of younger cohorts who decide to work longer.
To translate this into everyday English (it’s written by an American Academic), this paper tells us that we view life expectancy based on our parent’s perceptions (who presumably took a cue from their parents).
Following this logic , we might expect us to still be thinking about life expectancy in biblical terms though I suspect that each generation nudges along a generation or two behind the curve.
But much more important is that when people wake up to the fact that they are likely to live longer than their DNA tells them, they adjust their behaviour and start acting a lot more “grown up”.
Which is important when we think about what this Guidance Guarantee is all about. Alan Higham reckons it’s about weeding out misconceptions and the most common misconception we have about death is that its a lot closer than it actually is.
If people use Mark’s death predictor , they may be horrified by their expected life expectancy. They may hand back the keys to the Lamborghini and take another look in the annuity showroom.
The best financial outcome for most people in later life is of course to work longer and the report suggests that once people have worked out that when they get to 60 they are only 2/3 of the way through life, they may think again about packing work in.
It took my Dad to retire at 57 to discover he didn’t like not working and it was 23 years later that he finally clocked off for the last time.
As each year went by , he seemed to grow a little more accustomed to the fact that he was not going anywhere fast and it’s only since he finally hung up his stethoscope at 80 that he’s started thinking about the imminence of his departure.
So I’m of a mind to suggest to my new buddies at the FCA that they commission this little bit of modelling and get those undergoing guidance the chance to work out how long they’re likely to live!
Perhaps that’ll curb the Lamborghini purchasing!