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Retirement Discussions / FIRE Wannabees
|Subject: Re: Life Expectancy||Date: 8/8/2003 12:10 PM|
|Author: workwayless||Number: 207 of 5084|
Hmmm..... I was wondering about that too--my family history is dismal, I have a huge family but know of only 1 relative who reached age 70 (and died at 72), many die in 40s or 50s. So then, to plan for age 100 seems ridiculous to me. My health is probably no better, though its hard to say. But how do you plan this--I mean if you predict wrong, you'll run out of money! Could you explain how you account for the possibility of living longer?
Well one thing I did was use statistical tools to predict my lifespan. Hopefully that allowed me to get a SWAG rather than a WAG :-)
Here's an example of a tool to predict your life expectancy;
However, it is still possible that I might live longer than projected. So I have a couple of fudge factors in my budget such as not factoring Social Security payments into my SWR.
Another fudge factor I choose to keep my WR to 4% or less. Let me explain. For a person with an average lifespan, 4% is probably the top range of SWR. But in my personal situation, 5% is a SWR. So 4% is really safe for me. As I get older--I'm late 40's now--I might look at increasing my WR.
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