by Bill Sweet
Kind of a weird question to ask - I know. I'm sorry about that. The good news is that they're actually quite good.
At the moment I am 35 and living in the USA, thus I have a 99.8% chance of making it to 2016. I'll take those odds.
Surprisingly, the chance of mortality at any given age is surprisingly low until very late in life. According to US mortality data, even at age 80 I would supposedly have a 93.8% chance of making it to 81. Assuming that I make it to age 80 first (I doubt this since personally, I drink too much beer).
Here's what your mortality probability looks like, based on 2007 data divided by the US population by age (I used 2011 population estimates since that was the oldest dataset that I could find):
If you took an advanced math course at some point you would recognize that as a remarkably consistent exponential curve. Note two things: first, as I mentioned above, that you have a 95% survival rate through your 70s - I found this very surprising. And uplifting. Secondly, take a look at that weird bump at age 0, which tells me that the first year of life is still somewhat rocky, even in the USA. I'd love to find out why that is.
The really interesting stuff starts if you plot the data on a logarithmic scale, which uses a power of 10 (x10, instead of x1) to tease out the incredible consistency of mortality:
Once you hit your 20s, your probability of mortality is basically a straight (well, exponential) line upward. I found that to be remarkable. So did Benjamin Gompertz who discovered this pattern in 1825.
A good rule of thumb: Your chance of dying in any single year doubles once every eight years or so.
That straight line is a useful illustration of the law of large numbers. The reason that life insurance is a conservative yet lucrative business is that while we can't know when any single person is going to pass away, we can pretty reliably predict how many on average a group of 100,000 people will, depending on their age. More information such as gender, height, weight, and whether or not a group smokes tobacco only increases the accuracy of the prediction, given a large enough sample.
Shout to the ladies - life expectancy for women exceeds that of men for just about every age:
Improvements in medical treatment and technology have doubtlessly pushed this curve upward in recent years, particularly in advanced Western countries such as the United States (war is, in particularly, awful as far as average life expectancy is concerned). In spite of this, the Gomertz curve illustrated above shows that there are limits to what the human body can sustain.
In the context of what I do for a living, this is a useful place to start a conversation, as many of my clients underestimate how long they are going to be here in need a source of income. Given that your chance of making it into your 60s and 70s and 80s is higher than any point in human history, are you saving enough and investing enough to be able to enjoy a long and happy retirement? I imagine that the average American dreams of retiring at 62-65, yet I wonder how realistic of a choice that will be going forward for many without a very aggressive savings rate today.
- Bill
