Financing for retirement can be complicated, and there are many factors that must be taken into account. One of the most important factors, which is sometimes misunderstood, is your longevity-that is, how long you might actually live. This is different from your life expectancy, which is how long an individual of your age, gender, and health would be anticipated to live on average. There is a significant chance that you will live for many years beyond the average, and you should consider this possibility when thinking about your retirement. Reflecting on this possibility will allow you to consider the risks of outliving your financial resources, i.e., the chance of running out of money during your lifetime, which is referred to here as retiree financial longevity risk. This Actuaries Longevity Illustrator (“ALI”) helps you do that by letting you see how long you might live. Take a look. You might be surprised by the results!

If your retirement plans involve two people, the considerations become even more complex. The ALI addresses two crucial concerns: “How long can we expect to live as a couple?” and “By how many years might one of us outlive the other?”

The ALI has been developed as an educational tool by the American Academy of Actuaries and the Society of Actuaries. Although the ALI has been designed to be used to estimate longevity for retirement, it may have additional applications. While the ALI provides a reasonable approximation, you or your spouse/partner’s actual lifetime can differ significantly from these estimates, either above or below. The ALI is not designed to address your finances; this includes your investments, your earning potential and your anticipated expenses.

How it works

With information you provide based on a few questions about your health, smoking habits and demographic characteristics, the ALI will produce tables and graphs showing the likelihood that you (and your spouse/partner, if applicable) may live to certain ages. In addition, the ALI provides information on the number of future years that you might expect to live, as opposed to living to certain ages. The tables and graphs can be used to help you understand your potential retiree financial longevity risk.


Suggested Citation

American Academy of Actuaries and Society of Actuaries, Actuaries Longevity Illustrator, http://www.longevityillustrator.org/, (accessed Month, DD, YYYY).