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How Long Must Your Money Last?

© Ann Needle

Happy New Year, people! And yes, it's time to revisit your financial strategies and all that. One of the reviews many financial planners would ask you to make around this time of year is to reassess whether your current or potential retirement nest egg could last as long as you. (Geez, I think I've asked you that question myself.) While these assessors often point you toward the average life expectancy for a person your age as a guide to the answer (did I do THAT?), other pundits are making a living off of helping you more closely calculate just how long you have to go on the planet.

In fact, our friends at The Wall Street Journal recently penned an amusing piece about just such on-line "life expectancy calculators," designed to assess factors such as personal and ancestral health, lifestyle, and emotional state in determining your life expectancy. While these calculators can never get close to the truth, they sure do open a window on your personal health habits - an important assessment to make in January, of course - and what changes you can make to more dramatically affect longevity.

More importantly, for our purposes it points up the many years many of us will need to make our money last. It also raises other important financial issues, in my head, such as whether current life and other insurance preparations are truly adequate.

This week, let's take a look at the Journal's find of life-expectancy calculators (though the views listed are my own). In upcoming pieces I'll talk about some of the financial preparations, given this information, that may need shoring up in the coming year(s).

Life Length On-Line

It's interesting to note that, of the Journal-cited sites listed, the ones that provide an actual life expectancy all came within one year of one another in the estimate of my life expectancy. (Okay, that's 83 to 84 - my high marks for non-smoking were chiseled the Cheetohs habit.)

www.northwesternmutual.com/games/longevity - From Northwestern Mutual Life Insurance Co., this site somehow had the most authentic feel. This could be due to the fact that most of the questions stick to the list an insurance agent is authorized to fire your way - personal and family heart history, smoking and dietary patterns, and driving habits. However, this means they sidestep questions that may not always be legal for insurers to ask, such as your immediate family's history with cancer or your bouts with emotional stress. And, anecdotal evidence suggests that these factors can, unfortunately, heavily influence lie expectancy.

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