Ready to shed some worry? Read on.
Worry is us. During our working years we worry about having enough money to retire.
As soon as we retire, we worry about running out of money before we die.
I know this well. I’m a lifetime Worrywart. Then, as a journalist, it is our highest professional duty to explore life on Earth as a constant source of angst. But what I’ve learned as a retiree is that life is better. More things work in our favor than work against us. That is why surveys routinely show that most retirees worry less and enjoy life more.
Measuring Your Retirement Security
A simple metric can tell you how our security grows. Just find how your lifetime retirement income has changed over time. You do this by dividing your financial assets by your household life expectancy. If your lifetime income remains the same or rises, you’re doing fine. If your lifetime income is declining, you may have a problem.
Most retirees learn they are doing OK. Some learn they are hysterically better than OK.
It would be nice if everyone knew this. But worry prevails.
It’s So Much Easier to Worry
Why does worry prevail? Simple. The financial services industry is devoted to convincing us that we should always be saving more because we’ll need more. It’s not so, but the idea works well for them. More assets=More fees.
Another is that we live in an uncertain world. Bad things happen. So, it’s difficult to believe that most of life is on our side once we retire.
Another is technical. It’s easy to state the idea – see how your lifetime income is doing. But the actual measurement involves more arithmetic and more knowledge than most people care to muster.
Easier Said Than Done
What’s so difficult? It isn’t knowing our financial assets – most of us can pull that information off account statements in a minute.
The hard part is figuring out how to measure our life expectancy. It varies by gender for singles. Couples have an entirely different measure. It’s called their Joint and Survivor Life Expectancy. (When you combine two lives, one member of the couple will likely survive longer than either would live as an individual.) It all gets nerdy fast. *
(* And, trust me, I’ve barely touched the surface of nerdiness here. Life expectancy, for instance, isn’t a drop-dead-by-date for you personally. It’s the age at which half of a large defined group of people can be expected to have died. The other half live longer.)
We can get a rough idea how we become more financially secure as we age by checking how our life expectancy changes between age 65 and age 80 (see table below). The less time we have, the less money we need. And our life expectancy drops significantly between age 65 and 80.
I call this the Sublime Blessing of Death. It’s inevitable, but when we are retired that certainty reduces our worry.
- The life expectancy of a single male is 17 years at age 65 but only 7 years at 80.
- The life expectancy of a single female is 20 years at age 65 but only 9 years at 80.
- The life expectancy of a couple is 28 years at age 65 but only 14.7 years at 80
Knowing that will open a huge door to living a bigger, fuller life.
Note to readers: You can explore this more, in small bites, by reading some of the columns listed below. If you’re on the nerdy side, check out the links to sources and references below. I particularly recommend financial planner Michael Kitces Joint Life Expectancy and Mortality Calculator.
Related columns:
Scott Burns, “The Pudding Report, 2024: Simplicity Is Freedom,” 3/23/2025: https://scottburns.com/the-pudding-report-2024-simplicity-is-freedom/
Scott Burns, “The Graceful, Soothing Curve of RMD Income,” 6/19/2021: https://scottburns.com/curve-of-rmd-income/
Scott Burns, “Falling in Love with Required Minimum Distributions,” 6/29/2019: https://scottburns.com/falling-in-love-with-required-minimum-distributions/
Scott Burns, “The Incredible Expanding Retirement,” 7/20/1999: https://scottburns.com/the-incredible-expanding-retirement/
Scott Burns, “Sandbagging the Pursuit of Happiness,” 9/10/2022: https://scottburns.com/sandbagging-the-pursuit-of-happiness/
Sources and References:
Social Security Life Expectancy Calculator: https://www.ssa.gov/OACT/population/longevity.html
Social Security Life Expectancy at Birth and Age 65 from 1940: https://www.ssa.gov/oact/NOTES/ran2/an2024-2.pdf
IRS Joint Life and Last Survivor Expectancy Table (as presented by TIAA): https://www.tiaa.org/public/pdf/rmd-joint-life-expect-table.pdf
IRS Uniform Lifetime Table for RMDs (as presented by Fidelity): https://www.fidelity.com/bin-public/060_www_fidelity_com/documents/UniformLifetimeTable.pdf
Full IRS Joint and Last Survivor Life Expectancy Table: https://www.irs.gov/publications/p590b#en_US_2024_publink100090290
Michael Kitces Joint Life Expectancy and Mortality Calculator: https://www.kitces.com/joint-life-expectancy-and-mortality-calculator/
This information is distributed for education purposes, and it is not to be construed as an offer, solicitation, recommendation, or endorsement of any particular security, product, or service.
Photo: Scott Burns, July 3, 2024 A cemetary on the Camino de Santiago
(c) Scott Burns, 2025
A good reminder to all: advertising for any type of product or service is to cause you to take action and purchase EVEN if the FUD is absurd.
This past week I read some an article about Medicare and how it stated potential large increases in premiums and that converting to a MA program could save you money….and yet, if you read about many of the MA insurance providers, they are starting to cut back on all the freebies.
Many need to understand who funds/authors articles to understand their perspectives and motivations….
How do you like the new DMN business section?
regards,
Bill