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Retirement Grows More Expensive

Retirement is expensive and will become even more expensive in the future with improved longevity, says Jean-Claude Ménard, chief actuary in the Office of the Chief Actuary for Canada. In a presentation ‒ ‘Mortality Projections of Public Pension Plans in Canada and its Financial Implications’ ‒ at the Society of Actuaries’ ‘Living to 100 International Symposium,’ he said projection of mortality rates is a difficult exercise since future mortality rates are highly uncertain, especially for people older than age 90. If mortality rates decrease at the same pace as observed over the past 15 years, a life expectancy of 100 could be attained in 85 years (2094) for males and in 112 years (2121) for females. This will result in increased costs for pension plans as beneficiaries are expected to receive their benefit for a longer period. Canada enjoys one of the top positions on longevity in the world and this is expected to continue. Canadian life expectancy at age 65 is projected to increase by three years to reach 25 years within the next 50 years. It means that half of Canadian retirees are expected to live past age 90. As well, by 2030, only British and Swiss men are expected to live longer than Canadian men whose life expectancy at age 65 is projected to reach more than 21 years. By the same year, only Japanese, British, Swiss, French, and Finnish women are projected to live longer than Canadian women. The Canadian female life expectancy at age 65 is projected to reach almost 24 years by 2030.

Courtesy of Benefits and Pensions Monitor website News Alerts

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