Actuaries are recognised as experts when it comes to life expectancy calculations. Recent research has found that many retirement calculation tools may not always reflect best practice when it comes to allowing for how long people live. This highlights the importance of the advanced calculation methods employed by actuaries.
The Actuaries Institute recommends that as a minimum, life expectancy be calculated using the Australian Government Actuary’s published mortality tables along with the published improvement factors to allow for the fact that life expectancies have tended to increase over time.
An example of what this looks like for retirees is as follows (using ALT 2015-17 and the 25 year improvement factors):
Note: Healthier retirees live even longer than these figures. For the couple, the figures relate to ‘second death’ (the age by which both will have died).