Every five years, the latest data is released on average life expectancies, that is, how many years you’re expected to live, on average. The table contained later in this article contains the most up-to-date information on expected lifetimes.
Note: The next batch of official data on life expectancies will be released in late 2019. The current life expectancy tables were released by the Australian Government Actuary in December 2014.
The risk of outliving your retirement savings is also known as ‘longevity risk’. Now that super funds, fund managers and other financial service providers have survived the GFC (although the recent volatility on world sharemarkets remains a distraction), a lingering issue concerning the super industry is ‘adequacy’ (or lack of ‘adequacy’), that is, the worry that Australians will indeed outlive their retirement savings.
Okay, the industry is pretty obsessed with the misbehaviour of certain sections of the financial services industry, in particular financial advisers associated with the major financial organisations (see SuperGuide articles Beyond the Royal Commission: 10 super strategies to protect your retirement and Boom! Productivity Commission super report finds the emperor has no clothes).
Even so, the evergreen issue seems to be the risk of Australians running out of money in retirement and relying solely on the Age Pension.
A key bit of information in any retirement plan is a guesstimate on your expected life span – your life expectancy. Anyone saving for retirement wants to save enough money to at least last their lifetime, at their desired level of income (see SuperGuide articles How much super do you need to retire comfortably? and Retirement income: Living on more than $60,000 a year). Many Australians also want to leave money to family members after they die (see SuperGuide articles Crunching the numbers: a $1 million retirement (7% and 5% returns) and Retirement Income Reckoner).
At the moment, annuities and hybrid annuities are the only product type offering a guaranteed income stream in retirement, unless you’re lucky enough to be the recipient of a defined benefit pension, paid from a large corporate super fund or a public sector fund. You can find more information about annuities in the following SuperGuide articles:
- Peace of mind, at a cost: 10 things to know about annuities
- Deferred lifetime annuities: Why does the Government want you to use them?
- Guest contributor: Reducing the risk of outliving your retirement savings
Note: As part of the 2016 Federal Budget, the Coalition government changed the laws from 1 July 2017, extending the tax exemption on earnings in the retirement phase (previously only applicable to superannuation pensions) to other products offering a guaranteed income stream, such as deferred lifetime annuities and in-house annuity products that super funds, or other financial organisations may want to offer. The Coalition government is actively encouraging more flexible retirement income products to ensure Australians have options to “better manage the financial risks they face in retirement, such as market risk, inflation risk and the risk that they may outlive their retirement savings”.
The practical effect of such retirement income products is that they are designed to provide guaranteed income, or potentially hybrid products where some income is guaranteed while the balance of the product is market-linked. For more information on these types of products, refer to articles listed in the earlier paragraph.
How long are you going to live?
You can find out how long you’re expected to live, on average, by locating your current age in the table below, and then checking the ‘female’ column or ‘male’ column, depending on your gender. For example, if you’re 55 years of age, you can expect to live another 31.02 years (if a female) and 27.71 years (if a male). If you’re 65 years, your average life expectancy is 22.05 years (if a female) and 19.22 years (if a male).
The longer you live, the greater your life expectancy becomes. At age 55 years, a female can expect to live to 86.02 years on average, while a 70-year-old female can expect to live to 87.80 years – nearly an extra two years. At age 87, a female can expect to live to 93.11 years – an extra 5 years in life expectancy from what a woman can expect at age 70, and an extra 7 years in life expectancy from what a woman can expect at age 55.
Note: The table below contains average life expectancies, and the age you can be expected to live to, on average, based on your life expectancy and your current age. You may well live longer than the average, or you may not reach your average life expectancy. For more information on Australian life expectancies see SuperGuide article Updated life tables: Have our life expectancies peaked?
Average life expectancies: Number of years to live from current age
|Years to live||Life expectancy (age)||Years to live||Life expectancy (age)|
Source: Compiled from Australian Life Tables, 2010-2012, Australian Government Actuary (www.aga.gov.au). Released 10 December 2014. Next update due in 2019.
For more information on retirement planning, see the following SuperGuide articles:
- Financial freedom: Retirement planning in six steps
- The super challenge: At what age should I retire?
- How much super do you need to retire comfortably?
- Retirement income: Living on more than $60,000 a year
- Retirement income: Want to live on $100,000 a year?
- Retirement income: Come on, how much super do I really need?
- How Much Super Is Enough Reckoner
- Crunching the numbers: a $1 million retirement (7% and 5% returns)
- Crunching the numbers: a $1.6 million retirement
- Low yields: A $1 million retirement on 3% or 2% returns
- Retirement Income Reckoner
- Maximum life expectancy: Have we reached our longevity limit?
- Retirement income: Today’s dollars, and why $1 million can’t last forever
- What is the retirement age in Australia?
- Retirement Age Reckoner: Discover your preservation age and Age Pension age
- Age Pension age increasing to 67 years (not 70 years)
- Accessing super: What is my preservation age?
- The super challenge: At what age should I retire?