A recent study found that, while life spans are on the rise across the globe, there is a widening gap in life expectancy between the richest and poorest populations, even within close geographic areas. After studying 1.4 billion US tax records from 1999 to 2014, as well as social security records, study authors explained that:
“These data were used to estimate race- and ethnicity-adjusted life expectancy at 40 years of age by household income percentile, sex, and geographic area, and to evaluate factors associated with differences in life expectancy.”
What they found was that, for male individuals, the life expectancy gap between the richest and poorest 1% has widened to 14.6 years, and 10.1 for women. The study also found that increases in life expectancy are occurring at a much greater rate for the wealthy than for the poorest Americans.
What does this mean for you? Well, if nothing else, it should underline the importance of estimating a long lifetime when calculating your financial needs throughout retirement. In general, our life-spans are growing at a significant rate. Since 1900 the global average lifespan has more than doubled. But in wealthier areas, with good access to medicine and healthier lifestyles, averages are going up even faster.
Just why this trend is occurring is a matter for debate. However, it is likely that access to quality healthcare services and medicines, healthier lifestyles and safer environments play a role. That might help explain why the study found that average life-spans among the wealthier populations they studied are increasing faster than everyone else’s.
Of course, every individual is unique, and no one has developed a means to accurately predict anyone’s actual lifespan. But because life-span is such an important component of your financial planning strategy, it is helpful to know that, statistically speaking, you are in fact likely to be around for a bit longer than your parents and grandparents’ generations were – and you would do well to plan accordingly. Contact us today to schedule an appointment.