Longevity

Longevity is the term given to the effect of people living longer. Longevity has a significant impact on the amount of money you need to save for your pension. For example a person used to retire at 65 and would on average have died by the age of 70. Therefore they would have worked for typically 45 years and been retired for only 5 years. Now with the reduction in manual work and the improvement in health care a person retires at only 60 and lives till they are 80. This means that in only 40 years of work they need to save up enough money to fund a retirement lasting 20 years i.e. half their income needs to be saved and/or profitably invested. This means a lot more money needs to be saved during your working life.

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