Canadians are living longer.1 The odds are good that your clients will be living a long life, so it’s important to ensure they won’t outlive their retirement savings.
Estimating your clients’ lifespans with greater accuracy can give you an edge in retirement income planning. Unlike a life expectancy calculator that provides only a single weighted average age, the new Longevity Risk Illustrator on the Money for Life web app considers the probability of living to different ages based on current age, gender and relationship status. This interactive tool can show your clients how long they’ll need retirement income and some of the risks associated with living longer.
To plan for their retirement income needs, first see how long they can expect to live. For example, entering basic information for a 54-year-old single male and a 54-year-old single female then clicking on the Calculate button creates colour-coded timelines showing the following results:
Male
Female
Your clients may not have considered the chances that they’ll live past age 85. After they’ve seen how long they could live, this visual bridge leads to a discussion about securing sufficient retirement income and health risks that could cut into that income. You can help your clients build their retirement income plan to last by following these three steps, which correspond to the three buttons at the bottom of the How long could you live? web page.
1. Plan for longevity risk – Retirement income demonstrations [click on this button]
How can your clients make their money last longer?
To minimize the chance of outliving their money, clients will consider products that can provide a guaranteed cheque for life. You have the option of launching two tools:
- Buy now, buy later tool – helps clients between the ages of 65–75 understand the best time to buy a life annuity to meet their retirement goals, as well as the trade-offs associated with delaying a life annuity purchase.
- Sustainable income demo tool – helps clients discover how a life annuity can increase their monthly income in retirement, as well as understanding the balance between income and risk in retirement.
2. See how your clients’ health may affect their retirement as they age – clicking on the Health impact button gives customized illustrations based on your clients. The following How could your health change with age? results show risks and projections for a 54-year-old single male:
3. Request PDF report – Export results PDF [click on this button]
As an advisor, you can send an email to yourself containing a personal report of a client’s results, which includes the customized illustrations of life expectancy and risks to health. Simply provide your email address, and you’ll receive a PDF. Take it with you to your next client meeting.
Sign on to sunlife.ca/advisor and go to the Money for Life web app to access the Longevity Risk Illustrator tool. To learn more about retirement solutions from Sun Life Financial, talk with your Sales Director.
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The new Money for Life – Longevity Risk Illustrator tool:
- Provides accurate projections for the life expectancy of your clients by incorporating population mortality from studies conducted by the Canadian Institute of Actuaries. It generates the 50th, 75th and 95th percentile life expectancy, based on your client’s current age and gender. It can also project how long a couple will live.
- Illustrates the increase in probability that Canadians could experience a critical illness in the last 10 years of their retirement. Data tables supporting this portion of the illustration are also from the Canadian Institute of Actuaries.
This demonstration tool is presented for information purposes only, and is not an insurance or investment contract. It’s for demonstration purposes and doesn’t replace professional legal or tax advice. The figures are not guaranteed, as they’re based on assumptions that are certain to change. There’s no guarantee of future performance.
1 Average life expectancy at age 65 is almost 84 years for men and almost 87 years for women. Table 102-0122, Health adjusted life expectancy, CANSIM (database), Statistics Canada, 2012.