Talk about money: New life expectancy figures can be misleading

You may have noticed the new data recently released from the National Center for Health Statistics that shows U.S. life expectancy is at an all-time high — nearly 78 years.
While this number is below 30 other industrialized countries, it is nonetheless impressive, but it can be misleading.
It is possible, and in fact probable, that your own life expectancy is a great deal higher. You may think I’m talking about the active and healthy lifestyles that many of us tend to lead on our side of the hill in Scotts Valley or the San Lorenzo Valley, but I’m not. You see, as you age, you may have fewer years to live, but you are actually increasing your life expectancy.
Allow me to explain.
Life expectancy is the average measure of how long a child born today is expected to live. For instance, the new data suggests that the average American-born child will live to be nearly 78 years of age. But this data includes all the infant mortality deaths, diseases and the reckless activities we tend to engage in during our adolescent years. As a person ages and survives these dangerous years, life expectancy actually increases.
Based on all this, here is a statistic that I think is much more impressive than the recently released figures: A 65-year-old couple that doesn’t smoke has, according to the American Society of Actuaries, a joint life expectancy of 92 years old. In other words, there’s a 50 percent chance that one of these two people lives beyond age 92. And there’s a 25 percent chance that one of these two individuals will live beyond 97.
If you start thinking of life expectancy in these terms, the newly established benchmark of 78 starts to actually appear young.
My point is to focus on realistic life expectancy assumptions when the time comes to plan for a successful retirement.
As I tell my clients, dying early is not a viable retirement plan, and successfully navigating 25 to 30 years or more of retirement is no simple task.
Sustaining an income stream from your investments, longevity risks, inflation, taxes, when to take Social Security, custodial care, medical expenditures — all these factors need to be carefully planned for.
In the coming weeks, I’ll discuss some of these issues in greater detail. But a good starting point for your planning is to use a realistic expiration date, otherwise you could end up like my own soon-to-be 85-year-old grandfather, who when I recently asked him what happened to all his retirement savings, he matter-of-factly replied “I never thought I’d live this long.”
Orion Melehan is a certified financial planner for LMC Financial Services in Scotts Valley. Contact him at

or***@lm**********.com











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Securities and investment advisory services offered through SagePoint Financial Inc. member FINRA/SIPC a registered investment advisor. LMC Financial Services is not affiliated with SagePoint Financial Inc. or registered as a broker/dealer.