Selfies arenât the basis of most retirement planning, but Jay Olshansky, a leading researcher in longevity and a professor in the School of Public Health at the University of Illinois, thinks they should be.
âThe face is a biomarker for the rate at which we age,â says Olshansky, who helped develop technology for the insurance industry to analyze photographs for quotes and underwriting. âWe can learn a lot more from a photo than you can imagine.â
The two most crucial questions in retirement planningâhow long are you likely to live, and how much of your life will be spent in relatively good health?âhave long been dismissed as unknowable. But thanks to facial analysis, gene testing, and other new technology, advisors and investors may finally be able to get answers that meaningfully change the way they navigate saving for and living in retirement. And it has as much to do with your health as it does your portfolio.
Lifespan is arguably the crux of all financial planning, especially how much an individual should save for retirement, and how much he or she can safely spend once retired. It can also influence decisions related to timing Social Security benefits, buying annuities, and getting long-term care insurance.
Most people rely on crude tools, wild guesses and wishes to determine how long theyâll live. In a survey released by AIG Life & Retirement last week, 53% of respondents said their goal is to live to the age of 100. Yet, the financial reality of living that long is daunting. In the same survey, the majority of respondents said they fear running out of money more than death itself.
The solution to managing longevity risk is to plan for it.
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Lifespan tables are a starting point for many would-be retirees. But they are based on an entire population of people, and donât take into account such factors as lifestyle, health, or family history.
Consider Olshansky, who is 65. A standard lifespan table from the Social Security Administration suggests heâll live to be 83. By his own assessmentâwhich encompasses a number of factors, including biomarkersâhe is on track to live into his 90s.
Calculators can give a more accurate read, but the results can vary dramatically depending on methodology and inputs. Anyone who goes this route should stick with a calculator that give results in probabilities rather than absolute numbers, says Olshansky, who recommends the American Academy of Actuariesâ Longevity Illustrator.
Of course, life expectancy is just one component of longevity. Health spanâhow many of the years you have left will be spent in relatively good mental and physical healthâshould also be part of the equation.
âPeople say they want to live to be 100, but the number itself is less relevant than how healthy you are,â says Olshansky. Indeed, health doesnât just determine quality of life, it is one of the single biggest wildcards for retirement planning.
This is where facial analysisâand other new technology, such as saliva-based tests for longevity genes and other biomarkersâcould offer a more nuanced look at lifespan. A new venture, Wealthspan Advisors, is gearing up to roll out a platform for advisors using the same technology that Olshansky and other researchers helped develop for the insurance industry.
Instead of simply asking clients how long they think they will live, planners ask a series of questions and take a photograph of a clientâs face. From that photo, the program provides an estimate for both lifespan and health span, and illustrates how lifestyle choices will influence those outcomes. âWhen you look young for your age, it usually means that you are aging at a slower rate,â Olshansky says, noting that the program isnât fooled by makeup and cosmetic procedures.
Would-be retirees shouldnât rewrite their financial playbook based on a single snapshot, but technology like this could offer a more accurate picture for planning.