How Long Do We Expect to Live? A Review of the Evidence

Abstract

How long people expect to live sets an important context for longevity risk in retirement planning and may contribute to the acceptability of policies to raise pension age. However, there have been few studies representative of a national population on subjective longevity. This paper reviews the available evidence. It finds that despite some studies reporting that subjective longevity is close to average measures in population life tables the prevailing tendency is to underestimate lifespans. Men generally reflect that they have lower actual longevity than women on average, but men are more optimistic, so that women are more likely to underestimate their likely longevity. People may take account of some mortality risk factors in estimating their own longevity, but appear not to understand the true extent of risk. There is little data on how people think about longevity or why they choose a particular estimate of their own likely lifespan. Thus, international evidence suggests potential for longevity risk in individual retirement planning and raises significant questions about the policy implications which can only become more acute in ageing populations.

Old age expectations are related to how long people want to live

“…Women have also been found to report a lower will to live (Carmel 2001; Carmel, Shrira and Shmotkin 2013) as well as less desire to prolong life by medical interventions in hypothetical health conditions (Carmel 2001), and also express less support for an extension of average life expectancy to 120 years (Dragojlovic 2013) relative to men. Thus, despite the fact that women tend to live longer than men, and that the public seems to be aware of this difference (O'Connell 2011), the evidence suggests that women are likely to report a younger PLE than men.…”

Financial planning and financial education for old age in times of change

“…A significant number of adults around the world are not covered by any formal pension plan, whether public or private. Indeed, low pension coverage and insufficient pension savings are among key policy concerns in many jurisdictions (OECD, 2014 [5]; Munnell, 2020 [17]). Worldwide, 68% of people above retirement age receive a pension, either contributory or non-contributory.…”

“…In the Netherlands, during the National pension days, MoneyWise provides Peru has incorporated the topic of long-term planning and savings as part of the financial education competencies of the national curricula. The SBS has also incorporated long-term savings and pension culture as part of their regular modules 17 of its Teacher Training Program "Finanzas en el Cole" and workplace programme "Finanzas para ti". Both programmes use as complementary material for the pension culture module, the guide: "Inform and Plan for your future".…”

The effect of subjective life expectancy on the participation in commercial pension insurance of Chinese elderly

“…Subjective life expectancy is an individual’s subjective perception or subjective prediction of the length of life and is mainly influenced by characteristics such as gender, lifestyle habits, and length of parental survival ( Hanna and Kène, 2010 ; O’Connell, 2011 ; Myrseth et al, 2019 ; Philipov and Scherbov, 2020 ). Subjective life expectancy affects individuals’ behavior decisions, such as insurance purchases, retirement age, consumption levels, and savings rates.…”