Early Retirement Planning: How Long Should I Plan on Withdrawing From My Portfolio?

One of the many questions facing an early retiree is how long he or she should plan to withdraw from their retirement portfolio. This is particularly important if one is married or in a committed relationship since prudent planning would include the amount of time that one or both is expected to live. It is relatively easy to find life expectancy tables for individuals but I was interested in how long a couple might expect to live. Since I'm currently 49 years old, I chose to look at life expectancies for a married couple, both aged 49. The results are rather surprising to me. Conventional financial planning often focuses on 30 or 40 year time periods without regard to the age of the retiree. I believe that this is inadequate for most early retirees, particularly those in their early fifties or younger.

The following table shows the life expectancy for a couple, both just turned age 49, as constructed from CDC data tables (2000). The percentages are the chances of one or both dying before the specified age. For example the chance that a 49 year old man will die before his 70th birthday is 23.28%. For a woman it is 15.11%. The chance that both will be dead by age 70 is only 3.52%.

Table 1

Age	Male	Female	Both
49-50	0.50%	0.28%	*0.00%*
50-51	1.03%	0.57%	*0.01%*
51-52	1.59%	0.90%	*0.01%*
52-53	2.19%	1.25%	*0.03%*
53-54	2.83%	1.63%	*0.05%*
54-55	3.52%	2.04%	*0.07%*
55-56	4.26%	2.49%	*0.11%*
56-57	5.06%	2.98%	*0.15%*
57-58	5.93%	3.52%	*0.21%*
58-59	6.88%	4.11%	*0.28%*
59-60	7.90%	4.75%	*0.38%*
60-61	9.01%	5.45%	*0.49%*
61-62	10.19%	6.22%	*0.63%*
62-63	11.47%	7.05%	*0.81%*
63-64	12.85%	7.96%	*1.02%*
64-65	14.33%	8.95%	*1.28%*
65-66	15.90%	10.01%	*1.59%*
66-67	17.58%	11.15%	*1.96%*
67-68	19.36%	12.37%	*2.40%*
68-69	21.26%	13.69%	*2.91%*
69-70	23.28%	15.11%	*3.52%*
70-71	25.45%	16.64%	*4.23%*
71-72	27.75%	18.27%	*5.07%*
72-73	30.16%	20.01%	*6.04%*
73-74	32.70%	21.87%	*7.15%*
74-75	35.35%	23.87%	*8.44%*
75-76	38.12%	26.02%	*9.92%*
76-77	40.99%	28.31%	*11.61%*
77-78	43.96%	30.75%	*13.52%*
78-79	47.01%	33.32%	*15.66%*
79-80	50.14%	36.06%	*18.08%*
80-81	53.37%	38.96%	*20.80%*
81-82	56.70%	42.04%	*23.84%*
82-83	60.12%	45.30%	*27.24%*
83-84	63.61%	48.73%	*31.00%*
84-85	67.11%	52.33%	*35.12%*
85-86	70.57%	56.08%	*39.57%*
86-87	73.95%	59.90%	*44.30%*
87-88	77.21%	63.77%	*49.24%*
88-89	80.32%	67.62%	*54.31%*
89-90	83.23%	71.40%	*59.43%*
90-91	85.92%	75.05%	*64.48%*
91-92	88.35%	78.54%	*69.39%*
92-93	90.52%	81.80%	*74.04%*
93-94	92.41%	84.80%	*78.37%*
94-95	94.03%	87.52%	*82.29%*
95-96	95.39%	89.92%	*85.78%*
96-97	96.51%	92.01%	*88.80%*
97-98	97.41%	93.79%	*91.36%*
98-99	98.12%	95.26%	*93.47%*
99-100	98.66%	96.46%	*95.17%*
100+	99.07%	97.42%	*96.51%*

As you can see, there is about a 5% chance that at least one of the couple will live to be 100. Thus, it would seem prudent for a married early retiree in his or her late forties or early fifties to make financial plans for least 50 years. For my own planning I have chosen 55 years.

Last edited: 12/07/2004

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