What Does Living Longer Mean
For Me
Louise Campbell, Tim Furlan
Agenda
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What is the issue
Looking at the world differently
Looking at causes
Strategies for individuals
What is the issue?
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A lot of the work on longevity to date has looked at average life expectancies not
individuals
Solutions have been focused on products not strategies
The reality is almost all superannuation in Australia is defined contribution (DC) with
individuals bearing the risk
Individual experience will vary from group averages
Individuals need a strategy first, then products to fit with the strategy – not the reverse
For actuaries, how do we stay relevant in a DC world?
Looking at the data differently
Female Longevity – Mode, Mean and Median
Source: ALT 1881-2007
Looking at the data differently
Female Longevity – Mode, Mean and Median
Source: ALT 1881-2007
Looking at the data differently
Survivors by Age – Australian Females
Source: ALT 1881-2007
Looking at the data differently
Probability of surviving from age 90 to 100
Source: ALT 1960-2007
Looking at the data differently
A word of warning –
Data at older ages is still scant
Source: http://www.theactuary.com/
Looking at causes
Causes of death ages 65 to 69
14000
Number of Deaths
12000
10000
8000
6000
4000
2000
0
Circulatory
Respiratory diseases
Digestive System diseases
Neoplasm
Endocrine, Nutritional & Metabolic Diseases
Other
Source: AIHW Grim Books http://www.aihw.gov.au/national-grim-books/
Looking at causes
Changes in Causes of Death Over Time Ages 85+
100%
80%
60%
40%
20%
0%
Circulatory
Digestive System diseases
Other
Neoplasm
Mental & behavioural disorders
Respiratory diseases
Genitourinary diseases
Source: AIHW Grim Books http://www.aihw.gov.au/national-grim-books/
Looking at causes
Research Funding in National Health Priority Areas
Source: NHMRC
Strategies for Individuals
General George B. McClellan
(source Wikipedia)
General Robert E Lee
(source Wikipedia)
Strategies for Individuals
Contribution rate required a retirement lasting to various ages, 2% real return
Strategies for Individuals
Budgeted Spending Versus Assumed Life Expectancy
Strategies for Individuals
Variability of Longevity
Source: ALT 2005-2007
Strategies for Individuals
Return on a Lifetime Annuity
Strategies for Individuals
Return on a Deferred Annuity (From 85)
Concluding remarks
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Individuals are not average
Individuals need strategies that effectively deal with the risks they’re facing
Strategies probably need to come before products
Overstating the risks and overreacting is not helpful