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This is how long your retirement savings needs to last you

How much have you got saved up for your retirement? (Source: Getty)

How long do your retirement funds need to last?

According to the experts at the Actuaries Institute, your safest bet is to calculate your financial plan to last until you’re nearly 100 years old.

In the 1960s, the life expectancy for the average Australian man and woman was roughly 76 and 81 respectively – but according to figures by the Australian Institute of Health and Welfare (AIHW), these ages have since jumped to 85 and 87.

“A healthy, well-educated female entering retirement today, who had an affluent career and enjoys a good quality of housing, is just as likely to live beyond age 100 as she is to die before age 80,” the Institute said.

In a pool of 1,000 healthy, educated professional 65-year old Australian couples, more than half will still have one spouse alive at age 95, according to the Actuaries Institute.

“Retirees wanting confidence need to know what age to plan to in order to have, say, 90 per cent certainty their planning horizon is sufficient,” said Actuaries Institute research note author Jim Hennington.

So, in order to be at least 80 per cent confident in your financial plan, you should calculate it to last you to 95 years old if you’re currently a single 65-year old male and 97 years old if you’re a single 65-year old female.

The new figures means that the way financial advisers calculate retirement plans might be outdated, said Actuaries Institute president Nicolette Rubinsztein.

“Life expectancy calculations are often required in the superannuation and financial planning industries. They have a material impact on the way retirement income strategies and products are evaluated.”

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