American Academy of Actuaries and Society of Actuaries
Announce Updated Financial Planning Tool for Retirement
WASHINGTON and CHICAGO, June 25,
2024 /PRNewswire/ -- The American Academy of
Actuaries (Academy) and the Society of Actuaries (SOA) have updated
the Actuaries Longevity Illustrator, an online tool that helps
users with a vital aspect of financial planning for retirement.
Originally launched in 2016, the Actuaries Longevity Illustrator
now has a more consumer friendly mobile version. This refreshed
resource makes it easier than ever to calculate the impact of an
important factor in retirement planning: longevity risk.
The term "longevity risk" is often misunderstood and refers to
how long a person might live. In retirement planning, longevity
risk involves the probability of living to various advanced ages
and the risk of outliving your resources. Planning for a secure
retirement should consider the chances that a person might live for
20 or 30 years past retirement or even longer, so they can manage
their financial resources appropriately. The illustrator helps
calculate longevity risk based on information provided by the
individual, and provides longevity estimates for both individuals
and couples. For couples, it shows the probability of one member
and both members living to various ages.
"Achieving financial security in retirement isn't just a
question of the assets you've accumulated, but critically involves
other questions like how long they may need to last," said Academy
Senior Retirement Fellow Linda K. Stone, MAAA, FSA. "Highlighting
longevity risk in retirement and providing an easy-to-use tool to
aid consumers in making informed decisions is an important way for
us to contribute to the public interest on behalf of our
profession."
The updated Actuaries Longevity Illustrator has an
easy-to-follow approach asking a few questions about the user's
general health, smoking habits, planned retirement age, current
age, and gender. The illustrator uses the answers to visualize the
likelihood of the individual and their partner living to various
ages. The tool also provides information on the chances of living
to different ages after retirement. This overall information can
show retiree financial longevity risk, which can help support sound
retirement planning.
"This illustrator prompts couples to consider and plan for
longevity risk. We've found that people are often surprised how
much greater the chance that at least one of the two of them will
live to a given age or a certain number of years after retirement,"
said Lisa A. Schilling, FSA, EA,
FCA, MAAA, Director of Practice Research, SOA Research
Institute.
Give the illustrator a try and see for yourself at
www.longevityillustrator.org, and share it with your family,
friends, and colleagues.
About the American Academy of Actuaries
The American Academy of Actuaries is a 20,000-member professional
association whose mission is to serve the public and the U.S.
actuarial profession. For more than 50 years, the Academy has
assisted public policymakers on all levels by providing leadership,
objective expertise, and actuarial advice on risk and financial
security issues. The Academy also sets qualification, practice, and
professionalism standards for actuaries in the United States. Visit actuary.org.
About the Society of Actuaries
With roots dating back
to 1889, the Society of Actuaries (SOA) is the world's largest
actuarial professional organization with more than 32,000 actuaries
as members. Through research and education, the SOA's mission is to
advance actuarial knowledge and enhance the ability of actuaries to
provide expert advice and relevant solutions for financial,
business and societal challenges. Visit www.soa.org/.
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SOURCE American Academy of Actuaries and Society of
Actuaries