Overview of ChooseFI Episode 617: The Hidden Assumption in Every Retirement Calculator
This episode argues that one of the biggest, least-discussed assumptions in retirement planning is how long your money needs to last. Most calculators quietly default to a planning horizon of age 90 or 95, even though that is often well above the average life expectancy for many people. Brad, Aubrey Williams, and Dr. Bobby DuBois explore how changing longevity assumptions can dramatically alter your FI number, spending plan, and retirement timing — and why retirement planning should be updated regularly rather than treated as a one-time decision.
The Hidden Assumption in Retirement Planning
Why age 90/95 matters so much
- Most retirement calculators assume you’ll live into your 90s.
- That assumption is usually invisible to the user, but it drives the size of the required nest egg.
- The episode reframes this as a major blind spot in FI modeling: if you assume a very long life by default, you may be over-saving, working longer, or spending too cautiously.
The opposite risk is often ignored
- Planning to 95 protects against running out of money.
- But it can also ignore the risk of dying earlier than expected, which may mean:
- saving too much,
- delaying retirement too long,
- or missing life experiences during your healthiest years.
Key Numbers and Example Scenarios
Life expectancy context
Dr. Bobby grounded the discussion with actuarial-style averages:
- From birth: roughly 71 years for men and 76 for women
- At age 55: roughly 79 for men and 82 for women
- At age 60:
- about 1/3 of men may live to 90
- about 1/2 of women may live to 90
The point: 90 or 95 is not an “average” default for many people; it’s a conservative assumption.
Sample FI model
Using a simplified linear example:
- Annual spending: $100,000
- Social Security: $48,000/year starting at 67
- Investment return: 6%
- Inflation: 2.5%
A person retiring at 65 would need:
- $714K if they live to 79
- 41% more if they live to 90
- 67% more if they live to 100
Earlier retirement changes the sensitivity
- If retirement happens at 45, the difference between living to 90 vs. 100 is much smaller:
- roughly 5% to 12% more depending on the horizon.
- The broader lesson: the impact of longevity assumptions depends heavily on how early you retire and how long the portfolio must fund your life.
Main Takeaways for FI Planning
1. Retirement planning should be updated yearly
Aubrey emphasized that financial planning is not “set it and forget it.”
- Health changes
- Market returns change
- Spending changes
- Longevity assumptions should change too
2. Plan for ranges, not a single date
- Instead of one fixed “end age,” use a range or confidence interval.
- Build in a legacy/terminal value if appropriate.
- Consider multiple scenarios:
- living shorter than expected,
- living to average life expectancy,
- living much longer than average,
- disability or the death of a spouse.
3. Social Security should not be treated as zero for most plans
- Especially for people close to claiming age, Social Security is a major part of the plan.
- Discounting it to zero is often overly pessimistic.
4. A 100% success rate often implies dying with excess money
- Aubrey noted that trying to guarantee a 100% success rate can lead to overly conservative plans.
- The goal is not certainty; it’s sustainable flexibility.
How to Estimate Your Own Longevity
Dr. Bobby outlined several useful inputs for thinking about your likely lifespan:
Actuarial tools
- Start with actuarial tables or mortality calculators.
- These provide a baseline probability estimate.
Family history
- Look at how long close relatives tend to live.
- Longevity has a meaningful genetic component, especially at older ages.
Health status
- Current conditions matter a lot:
- heart disease
- diabetes
- blood pressure
- obesity
- lung/liver/autoimmune issues
- Your doctor can help assess whether these affect life expectancy.
Cardiovascular risk calculators
- Since heart disease is the most common cause of death, tools like the American Heart Association’s PREVENT calculator can help estimate risk over 10 and 30 years.
Genetic testing
- Bobby mentioned APOE testing as one possible input for dementia risk.
- APOE4 raises concern, but genes are not destiny.
Biological age tests: not ready for prime time
- “Biologic clock” tests may be interesting, but Bobby was skeptical:
- results vary between labs,
- results vary over time,
- and there’s no proof that lowering the test score improves outcomes.
What Actually Improves Longevity and Healthspan
The episode also highlighted practical health levers that can improve the odds of living well longer:
- Don’t smoke
- Control blood pressure
- Manage cholesterol
- Address diabetes
- Maintain a healthy weight
- Exercise regularly
- Prioritize sleep
- Get appropriate screenings
- Strength train to preserve muscle and reduce injury/fall risk
A particularly useful idea:
- Build physical capacity early, the way you build savings in an IRA.
- As you age, you naturally lose muscle and recover more slowly, so maintaining strength becomes increasingly important.
A Broader Planning Mindset
Don’t just plan for living too long
The FI community is often focused on not running out of money, but this episode expands the framework:
- What if one spouse dies earlier?
- What if disability changes the plan?
- What if you live shorter than average?
- What if health changes your spending needs?
The message is to plan across the full spectrum of possibilities, not just the worst-case “living forever” scenario.
Action Items
- Review your retirement calculator assumptions, especially the end age.
- Re-estimate your FI number using multiple life expectancy scenarios.
- Include Social Security realistically rather than defaulting it to zero.
- Update your plan annually as health, age, and market conditions change.
- Use practical longevity inputs:
- family history,
- current health,
- cardiovascular risk,
- and lifestyle habits.
- Focus on the high-impact health behaviors: sleep, exercise, nutrition, blood pressure, cholesterol, and weight management.
Resources Mentioned
Bobby DuBois
- Podcast: Live Long and Well with Dr. Bobby
- Website/newsletter: drbobbyevidence.com
Aubrey Williams
- Website: openpath.financial
Final Thought
The central insight of the episode is simple but powerful: many retirement calculators are built on a hidden longevity assumption that may not fit your actual life. Once you see it, you can’t unsee it — and that can change how you think about your FI number, your spending, and the timing of retirement itself.