Oct 30, 2016

Interactive: How Long Are You Going to Live?

Nice question to get your students engaged in your lesson about saving for retirement. Here’s an interactive from the Actuaries Longevity Illustrator to help answer that question. I created two fictitious high school students, Bill Bradley and Samantha Taggart to demonstrate a potential mini-activity:

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After you click “View Results”, you get three charts each of which can be converted into data tables which your students can analyze. Here’s a data table that looks at the probability that Bill and Samantha will live to a certain age:

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Questions for your students:

    • Who has a longer life expectancy, Bill or Samantha?
    • Does the difference between Samantha’s life expectancy and Bill’s increase or decrease with age?
    • During what 5 year-interval does Bill’s probability of being alive drop the most? How about for Samantha?
    • Finish these statements:
      • Bill has a ____________ probability of living until 90
      • Samantha has a ________ probability of living until 95
    • The assumptions that went into this simulation assumed that both young people were non-smokers and in excellent health. Run the same simulation assuming a smoker with average health for each of them.
      • Use the spreadsheet  for the analysis.
      • Students can enter probabilities directly into the spreadsheet.
      • Subtract the Excellent column from the Average column to determine the impact of smoking on the probability of living to a certain age.
      • What did you learn from this exercise?
    • Assuming that you work until the age of 65 (typical retirement age), about how many years would you expect to live after that?
    • Does this mini-activity make you more or less interested in saving for retirement?

About the Author

Tim Ranzetta

Tim's saving habits started at seven when a neighbor with a broken hip gave him a dog walking job. Her recovery, which took almost a year, resulted in Tim getting to know the bank tellers quite well (and accumulating a savings account balance of over $300!). His recent entrepreneurial adventures have included driving a shredding truck, analyzing executive compensation packages for Fortune 500 companies and helping families make better college financing decisions. After volunteering in 2010 to create and teach a personal finance program at Eastside College Prep in East Palo Alto, Tim saw firsthand the impact of an engaging and activity-based curriculum, which inspired him to start a new non-profit, Next Gen Personal Finance.

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