Individuals aged 50 to 65 routinely underestimate their life expectancy by up to eight years, according to the findings of new research from Aviva.
In a survey; healthy female respondents said they believed that they would live to 84, while their male counterparts said 80. However, the actual life expectancy for those groups currently stands at 89 and 88 years respectively.
In another survey by Aegon, one in ten people approaching retirement believes that their pension pot will only need to last ten years. This has led to concerns being raised that some individuals may be underprepared for retirement at a time when financial readiness is more important than ever.
Source: Just Retirement.
So, how long will you live and how long will your pension need to last for?
I tried a few of these online sites to predict my life expectancy, but the results I got were widely different. According to one I would live to 74.6 years, 83.5 years according to another but as much as 85.9 when I input some lifestyle details. That didn’t really help me much!
Under the terms of the pension reforms coming into effect in April, people will be able to access their pension pot from 55. If they want to, they can also take ALL of their pension pot as a cash lump sum. However, that money might have to last them for 25 or perhaps 30 years so serious consideration on how you will fund your lifestyle in retirement will be needed because once it has gone - it has gone!
If you would like to talk to a qualified financial planner who can help you answer these questions and many more, please give us a call.