Wednesday, September 05, 2007

People are living longer

I made a research into trend in death rates in Singapore during the 10 years from 1996 and 2006.

The death rates for each age group, falls by about 4% per year. For example, for males age 55 to 59, the death rate dropped from 17.9 per in 1996 to 11.3 in 2006.

If this trend continues, we will see some interesting situations:

1. Based on the current death rates, a male age 65 can expect to live another 17.8 years. If the rates continue to fall, the life expectancy increases to 27.3 years, i.e. 10 years more.

2. If the age-specific death rates continue to fall by 4% per year, a baby born today can expect to live to an average of 116 years. Wow!

What does this mean? It is important to have a life annuity. You will live longer than you expect!

Note. Some people think that it is not possible for death rates to continue to fall by 4% per year. It will reach a certain point and stop declining after that.
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2 comments:

Anonymous said...

There is no dispute that annuity is good. The problem is today the annuities pay very low. This explains the low take up rate.
If annuity can be administrated with a huge pool the rate can improve. There is no need to entirely depend on the long term bond rate. The annuity can be a variation of the fixed rate annuity and variable annuity combining both features.
The appropriate body to undertake this job is the CPF. We hope CPF
sees its social role to provide for
the people especially the poor.

September 05, 2007 11:32 PM
Khiat Han Hwee Adrian said...

My guess is that the rate will not continue at 4% yearly. This percentage should reduced gradually and stabilised at a much lower rate over the next 10 yrs.

September 06, 2007 12:57 AM

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