Reply to Lump sum vs monthly benefit and life expectancy

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Most men do not make it to 80, so saying they are still alive at 65 is not accurate to assume they have another 15 years left. I know plenty of men who made it to 65 but not 75.[/quote]

Actually, life expectancy at 65 is about 82 for men. So more than half of 65-year-old men will live more than 15 additional years.[/quote]

You also need to consider your SES to get a more accurate estimate of your life expectancy. If you are in the top 25% of the income distribution your life expectancy (at age 65) is 22.5 years for men and 25.5 for women. https://www.ssa.gov/policy/docs/ssb/v81n3/v81n3p19.html. [/quote]

This.  There are two main things that go into calculating that lump sum.  A present value interest rate and the actuarial life expectancy table.  [b]If you are a healthy educated upper middle class person (especially if you are white) you will probably beat the actuarial tables[/b].   (Some of the companies are now trying to go to a system that uses your zip code as a proxy for all this.).  Whether you can beat the interest rate is a more complicated question but remember that the lump sum puts all the risk of market downturns on you, whereas the monthly payment keeps the risk on the company.  So there’s a cost to that risk shifting, although it’s hard to value that risk.  [/quote]

The issue we have in the US isn't living longer but rather our quality of life as we age. Regardless of race and income we do not have a healthy lifestyle.[b] By the time we retire we have been for over 30 years most likely once a week at minimum consumers of alcohol.[/b] If you look at NIH data Americans over 65 with chronic illnesses is insane compared to the rest of the Western world. As a result we spend a lot of time dealing with health issues.[/quote]

In contrast to, say, France, England, Italy and Germany?[/quote]

Yes, this alcohol thing is a red herring. All the countries that have much longer quality-adjusted life expectancy than the US also have higher alcohol consumption. [/quote]

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