People are living longer

REVISED: People are living longer. Many people do not realise the significance of this statement.

Based on the current death rates, a male at age 65 has an average life expectancy of 16.8 years. Most people think that the chance of surviving past 81 years is about 50%. Actually, the chance is much higher.

I looked at the death rates of people in various age groups, as reported in Population Trends, published by the governemnt's Department of Statistics.

Over a period of 25 years, from 1980 to 2005, the death rate fell by about an average of 3 percent yearly. For example, the death rate for 40-45 years was 2.9 per 1000 popuation in 1980. It fell to 1.4 in 2005.

If less people die in each year, more people will live longer. If we assume that this improvement of 3% continues yearly over the next 30 years, the average life expectancy of a male at 65 is 22.7 years (as compared to the current 16.8 years). You can expect to live 6 years longer.

Here is something for you to ponder. You should plan for your CPF savings to last beyond age 85. This is why the Government wants to encourage people to buy life annuity - so that their minimum sum can stretch over a lifetime.