The sobering report on alcohol consumption released several weeks ago has me playing around with life expectancy calculators.
Based on how much I drink and other factors, how long can I expect to live? The answer according to a calculator produced by an organization called Project Big Life is 90 years, which is line with most of the other life expectancy tools I’ve tried over the years.
Life expectancy is one of the most important inputs in financial planning. Your number depends on lifestyle, health issues and family history, but financial planners commonly use 90 to 95 as a default range. Living that long could mean 25 to 30 years of retirement, which you’ll need to fund through a mix of Canada Pension Plan, Old Age Security, personal savings and a company pension, if you’re fortunate enough to have one.
Big Life’s tool asks about smoking, eating habits, exercise routine and family background, as well as the number of alcoholic beverages consumed weekly. The end result is your estimated life expectancy and your “health age,” which is basically an assessment of the shape your body is in. My health age is younger than my actual age because I exercise, eat pretty well and have a build that can basically be described as slim to scrawny. But I also like a drink from time to time, especially now that I’m at a stage in life where I can afford alcoholic products that actually taste good.
The alcohol study, produced by the Canadian Centre on Substance Use and Addiction, found that a person should consume an average of zero to two standard drinks a week to be at a low risk of suffering negative, acute and/or long-term health outcomes from drinking. Three to six drinks per week puts someone at a moderate risk of negative health outcomes, and six or more standard drinks per week puts a person at a high risk.
Lifestyle choices have a big effect on life expectancy, drinking included. Calculators like Big Life help you see how your choices come together into a number that should be central in your retirement planning. Next step: find out how well your retirement savings match up with your projected lifespan. Stay tuned for some help with that.
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Rob’s personal finance reading list
An economist vs. the personal finance gurus
An economist weighs the advice given by authors of personal finance books and finds some of it unhelpful. For example, he’s open to the idea of young people putting more emphasis on spending as opposed to saving.
Real estate nightmare, Toronto-style
They bought a pre-construction house north of Toronto in 2018 for $400,000. Then came a letter from the builder cancelling the contract unless the family paid an additional $100,000. Now for a comparison of what $300,000 buys you in terms of square footage in housing markets across the country. The Prairies, Quebec and Atlantic Canada stand out as values.
Retired and spending less
New research finds that U.S. retirees feel fine about spending money, but choose to spend below their means. Encouraging for people who feel stressed they’re not saving enough to live up to pre-conceived ideas of a lux retirement. “As people age, they report less satisfaction from travel, as well as from new cars, clothes and appliances.”
Finance myths that drive people crazy
A fun thread on the Reddit online forum where people vent about personal finance advice and other money stuff that bugs them.
Ask Rob
Q: My daughter has a registered disability savings plan (RDSP) with a big bank. I am trying to get a low-cost mutual fund for investing purposes. The best they will offer is a fund with a management expense ratio of 1.5 per cent. Are we being treated fairly by the bank? Why can’t a bank offer a low-MER mutual fund for her?
A: Suggestion – consider a self-directed RDSP at online brokers TD Direct Investing or National Bank Direct Brokerage. You can invest in low-fee exchange-traded funds, or buy stocks directly and avoid MERs altogether. Depending on your account size, there may be account maintenance or admin fees.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
A rundown on how to use the new Tax-Free First Home Savings Account. Written for financial advisers, but helpful for all who want to understand these new accounts.
The Money-Free Zone
With the Toronto Blue Jays headed to the Major League Baseball playoffs, it’s an ideal time to catch up with a great story Globe media writer Simon Houpt recently did on veteran Jays broadcaster Buck Martinez.
From the Twitterverse
A summer snapshot of housing unaffordability. Tillsonburg, Ont., vs. Tokyo.
In case you missed these personal finance stories
- Young Canadians go to school longer for jobs that pay less, and then face soaring home prices
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More Rob Carrick and money coverage
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