Retirement planning requires that you consider life expectancy when determining how to invest your money. According to the Society of Actuaries Annuity 2000 Mortality Table, this could easily mean that many people will outlive their own life expectancy making it necessary for them to have access to additional income for up to 50 years after retirement. This means most people ought to think long and hard about longevity risk and the very real possibility that the funds they have set aside for their golden years may come up drastically short.

The actual figures indicate that a healthy 65-year-old man who has a life expectancy of age 81, has a 50 percent probability of reaching age 85 and a 25 percent probability of reaching age 92. For a woman age 65, the odds rise to a 50 percent chance of reaching 88 and a one-in-four chance of reaching age 94. For married couples the odds further show that at least one member of a 65-year-old couple has a 50 percent probability of reaching 92, and at least a 25 percent chance of one of them reaching 97.

There has never been a generation in history that has been faced with a challenge of the magnitude and scope that faces you today. What happens if you live to be 95, 100, or beyond? If you retire at 60, you may need income for another 35, 40, or possibly even 50 years. Will your income last as long as you do?

What this all means is that each of us who is nearing retirement must take a good hard look at our financial future to determine if our needs will be met when we are too old or sick to work at WalMart as a greeter. To do that it is wise to consult an expert who specializes in working with retirees so that you can maximize the earnings you currently have access to.

Tags: retirement planning, financial future, life expectancy, actuaries, morality table