Inflation-Adjusted Retirement Planning



How long you will live is a most important input of retirement planning.  The terms frequently heard are cohort group, Life Expectancy, and Lifespan.  Life Expectancy and Lifespan have very different meaning in retirement planning.


Cohort group is the collection of all persons born in the same year.  Generally, cohort groups are broken down by race and gender, as well as demographic area. 

Life Expectancy is the point in a cohort group that 50% of the members are dead, and 50% are still alive.  Life expectancy is expressed as an age.  It is the theoretical break-even age for insurance companies for a particular cohort group.  It is useful in setting actuarial tables and insurance premiums for life insurance Life expectancy is not a useful planning age for retirement planning.

Lifespan is the age you, as an individual, not as a member of a group, expect to live.  There are probabilities associated with the age you might live to before you die.  We recommend that you pick at least the 90% probability of dying, which for most demographic cohort groups is between 95 and 99 years of age.  The reason we take such a conservative position is that you cannot afford to run out of funds before you die -- you would be destitute.  It is far better to have a balance in your retirement account when you die, than to be destitute for years before you die.  

Below are links to Lifespan Probability Charts for White and Black males and females.  Hispanic males and females are in between white and black.

Lifespan Probability Charts

White male White female
Black Male Black Female


2008, Simon Revere Mouer III
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