Life Expectancies in America Continue to Increase
Life Expectancy Tables provide an estimate of your life expectancy, or, an estimate how many remaining years you have left to live.
Life expectancy, also referred to as longevity, is a critical component to consider when developing a retirement income plan. Longevity is one of the 5 Key Risks everyone experiences in retirement. Below you will find the current Annuity Life Expectancy Tables that may prove helpful when completing a retirement income plan.
In addition, The Social Security Administration has a life expectancy calculator on their website, ssa.gov, that you the average number of additional years a person can expect to live, based only on the gender and date of birth you enter.
Many retirement experts, including Dr. Wade Pfau, suggest longevity is most important risk in retirement because it has the ability to amplify all other risks.
The longer you live the more opportunity to be impacted by:
- Inflation Risk
- Sequence of Returns Risk
- Market Volatility
A recent actuarial study showed that Americans with 2012 as year of birth of 2012 born in the USA are expected to reach the age of 78.8 years – a record high.
That was an increase of 0.1 year from 2011 when it was 78.7 years, according to a new report on mortality in the USA from the Centers for Disease Control and Prevention’s National Center for Health Statistics.
The news is a little better for women, a little worse for men. Life expectancy for females is 81.2 years; for males, it’s 76.4 years. That difference of 4.8 years is the same as in 2011.
The Office of the Actuary of the Social Security Administration conducts actuarial studies to predict how long Americans will live based on sex and calendar year. There are two types of life expectancy tables:
- Cohort Life Expectancy Tables
- Period Life Expectancy Tables
Cohort Life Expectancy Tables
Cohort life expectancy tables show the probability of a person from a given cohort, or group of people, dying at each age over the course of their lifetime. The cohort life table is based on age-specific probabilities of death, which are calculated using observed deaths (mortality) data from the cohort.
A cohort life table uses a combination of observed mortality rates for past years and projections about mortality rates for the cohort in future years. For example, cohort life expectancy at age 65 in 2016 worked out using the mortality rate for age 65 years in 2016. So if you’ve made it to age 65 your life expectancy in total number of years would be greater than it was at birth.
The cohort life table takes into account observed and projected improvements in mortality for the cohort throughout its lifetime. Cohort figures are therefore regarded as a more appropriate measure of how long a person of a given age would be expected to live on average than the alternative measure, known as period life expectancy, which is calculated using mortality rates for a fixed period in time.
Period Life Expectancy Tables
Period life expectancy tables are based on the mortality experience of a population during a relatively short period of time.
For example, a period life table would show someone at age 65 years in 2020 would use the mortality rates for 2020 for ages 65, 66 and 67 years and so on. Period life expectancy would match cohort life expectancy only if there were no change in age-specific mortality rates over time; this is an extremely unlikely scenario, as these change from year to year.
It is important to understand that these are projections and not forecasts. As we do not know what the future will hold, we make assumptions about how mortality rates will change in the future. Information on how mortality rates have changed in the past is used to estimate the current rate of mortality improvement by sex and calendar year to make assumptions about improvements in mortality in the future.
Data and Methods
The data used to prepare the 2017 tables are final numbers of deaths for the year 2017. July 1, 2017 population estimates based on the 2010 decennial census; and age-specific death and population counts for Medicare beneficiaries aged 66–99 for the year 2017 from the Centers for Medicare & Medicaid Services.
Data from the Medicare program are used to supplement vital statistics and census data for ages 66 and over. The U.S. life expectancy tables by Hispanic origin are based on death rates that have been adjusted for race and ethnicity misclassification on death certificates using classification ratios (or correction factors) generated from an updated evaluation of race and Hispanic-origin mis-classification on death certificates in the United States.
SOURCE: National Vital Statistics Report, Volume 68, Number 7. “United States Life Tables, 2017. by Elizabeth Arias, Ph.D., and Jiaquan Xu, M.D., Division of Vital Statistics. June 24, 2019 https://www.cdc.gov/nchs/data/nvsr/nvsr68/nvsr68_07-508.pdf
1Life tables by Hispanic origin are based on death rates that have been adjusted for race and ethnicity misclassification on death certificates. Updated classification ratios were applied; see Technical Notes.
SOURCE: NCHS, National Vital Statistics System, Mortality.
Period Life Expectancy Tables, 2017
Note: The period life expectancy at a given age for 2017 represents the average number of years of life remaining if a group of persons at that age were to experience the mortality rates for 2017 over the course of their remaining life. Death Probability = Probability of dying within 1 year. Number of Lives = number of survivors out of 100,000 born alive. Source: http://www.ssa.gov/OACT/STATS/table4c6.html Period Life Table, 2017 | Last Updated: June 9th, 2020.
Cohort Life Expectancy Tables