Big Question in Retirement Planning: How Long Will I Live?
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What is the main topic discussed in this episode?
Here's your money briefing. I'm J.R. Whalen at The Wall Street Journal in New York. They say age is just a number, but estimating how long you'll live can help you decide how much to put aside for retirement.
What new online tools help estimate how long I will live for retirement planning?
New tools are available that combine traditional longevity factors with financial and lifestyle information to predict someone's lifespan.
How much income you have might be correlated with, you know, how often you can go to the doctor and how educated you are might be correlated with, you know, not only how often you go to the doctor, but if you do, if you follow instructions that are given to you by the doctor.
That's Wall Street Journal reporter Anne Turgason. She'll also explain how data from companies like 23andMe is being used to help determine the likelihood you'll face illness later in life. That's next.
Knowing how long we'll live and how many of those years will be healthy would make planning for retirement easy. But those data points are unknown. Retirement savers can turn to online tools and services to help them get lifespan estimates to make financial planning a little easier. And Wall Street Journal reporter Ann Tergesen is here to discuss. So, Ann, traditionally, what sorts of data have financial advisors used to tell clients how much they should put away for retirement?
you know, typically what financial advisors will do is, it's some variation on this, but they'll look up some kind of life expectancy figure for the person, usually in, you know, some kind of government tables. IRS publishes some tables.
How did financial advisors traditionally estimate life expectancy for retirement?
Social Security Administration has estimates. So, you know, it's pretty easy to come by. Often, you know, they might use an estimate for a man, you know, just by gender, because men, women tend to outlive men of the same age. So, They'll do that. And then, you know, often they'll add some kind of margin on maybe five years, maybe 10 years for someone who has very long-lived relatives just to give some kind of, you know, margin for safety.
And that's based on a framework of their biological age, what their actual age and years is.
Right. That's your chronological age. So it's like looking up, you know, how long do you expect this person to live? And then you can kind of look at how much they spend and you get an estimate of what they might want to spend in retirement. You multiply the spending by the number of years that you expect them to live.
But now there are some new sets of data being added to this formula.
I was very interested in—the issue is that, like, academic research shows that people can be on very different trajectories depending on various characteristics that they might have. We all think about genetics as being—playing a big role in how long we're likely to live. You know, if you have family members who've lived into their 80s, 90s, or, you know, maybe even hit 100, you tend to assume that means that you're going to live a long time. But actually, the information, scientific data shows that genetics typically account for about 20 percent of longevity. You know, that's not the case for everybody. You can get, you know, some kind of inherited disease that might, you know, be like fatal.
But, you know, barring something like that, you know, typically genetics aren't really the overriding determinant of how long people live. So academic research shows that things like income, wealth, education play a very big role. And so you can see in the top 1% of the income distribution that Men tend to live 15 years longer on average than men who are in the bottom 1%. So that's a really significant difference. So, you know, I think a lot of academics and others are waking up to the possibility of providing people with more customized, personalized information about what their potential lifespan will be like.
And it could also be adding in just poor choices in terms of what they do during their life.
Yeah, lifestyle plays a big role as well.
So things like, I suppose, smoking would play a significant role.
Right. So things like smoking, you know, potentially all the things you would think about, like exercise habits or, you know, do you have a good diet or are you eating, you know, just junk food all the time?
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:05–0:16
2
What new online tools help estimate how long I will live for retirement planning?
0:16–1:38
3
How did financial advisors traditionally estimate life expectancy for retirement?
1:38–4:09
4
What non-genetic factors (income, education, lifestyle) most influence longevity estimates?
4:09–8:10
5
How do researchers and academics personalize lifespan predictions beyond chronological age?
8:10–9:47
Speakers
2 identifiedMore from WSJ Your Money Briefing
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