February 5th 2020,


Let’s take stock on life expectancy!


We often read that the life expectancy of Canadians is constantly increasing and that we must prepare to live longer. The 24-year-old boy who died recently in a car accident, however, had a life expectancy of over 80 years. He could not care less about this statistic! He is dead. But his death impacts your life expectancy!

Life expectancy at birth
According to the Quebec Institute of Statistics, in 2017, life expectancy at birth in Quebec was 80.6 years for a man and 84.5 years for a woman. Life expectancy at birth, is a statistic impacted by newborn deaths and by the one of the 24 years old young man mentioned in our introduction.
Our life expectancy increases each day. For example, a 65-year-old man no longer needs to worry about birth or being in an automobile accident at 24. His life expectancy is now approximately 90 years. Here again, one should be aware of the limitations of this statistic. There will be men who will die between 65 and 70, 70 and 80. Despite their life expectancy of 90 years, a large majority of 65 years old men will die before reaching it.

Longevity and retirement savings
We easily remember our neighbor who retired at 65 and died at 70 from cancer than our aunt who died at the age of 95 confined to a wheelchair in a nursing home.

Our selective memory induces a false perception of our longevity and therefore a deficit in our retirement savings.
We often hear, especially from « baby boomers », phrases such as: « Let’s enjoy life while we can! »

Mr. Robert Bourbeau, Professor Emeritus of the Montreal University Department of Demography proposes to use probability of survival concept illustrated by the table below.

For example, a 60-year-old woman has a one-in-two chance of reaching the age of 91, while for a man, it is 89. This woman has a one in four chance of reaching 96 years of age while for a man  is 94.
Let’s say you and your spouse are 50 years old, one of you will undoubtedly  reach 90. Think about it for two minutes!

Even one-in-four chance is huge!
We all have to prepare to live a long time. Therefore, we have to start saving at an early age.
Holder of the Industrial Alliance Research Chair on the economic challenges of demographic changes, Pierre-Carl Michaud pointed out that the market for individual annuities has stagnated over the past ten years. « When you have a significant amount of money, it is hard to let it go in exchange for a guaranteed monthly payment. « 

Conclusion
Our role is to help you understand the issue of your life expectancy and to help you make informed decisions so you do not run out of money while you are living.

Mauro DiCesare, B.Comm, Pl.FinPlanificateur Financier/Financial Planner 
Financial Security Advisor/Conseiller en Sécurité Financière avec Groupe Financier Finvest Inc.
Mutual Fund Representative/Représentant en épargne collective avec Investia Services Financiers Inc.
514-376-7771