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Selfies are not the basis of most retirement plans, but Jay Olshansky, a leading longevity researcher and professor at the University of Illinois School of Public Health, thinks they should 'be.
"The face is a biomarker for the rate at which we are getting older," said Olshansky, who helped develop technology for the insurance industry to analyze photographs for quote and underwriting purposes. "We can learn a lot more from a photo than you can imagine."
The two most crucial questions of retirement planning – how long will you live and how long will your life be spent in relatively good health? – have long been dismissed as unknowable. But thanks to facial analysis, genetic testing and other new technologies, counselors and investors may finally be able to get answers that will dramatically change the way they manage their savings. and their retirement. And it has as much to do with your health as with your wallet.
It can be argued that life is at the heart of any financial planning, especially how much a person should save for retirement and how much they can safely spend when they retire. It can also affect decisions regarding the timing of social security benefits, the purchase of annuities and the underwriting of long-term care insurance.
Most people rely on rudimentary tools, wild guesses and wishes to determine how long they will live. In a survey released by AIG Life and Retirement last week, 53% of respondents said their goal was to live up to 100 years. Yet the financial reality of such a long life is daunting. In the same survey, the majority of respondents said they feared they would run out of money more than death itself.
The solution for managing longevity risk is to plan accordingly.
Read our recent cover story: How your kids can ruin your retirement – and how to make sure they do not
Life tables are a starting point for many potential retirees. But they are based on an entire population and do not take into account factors such as lifestyle, health or family history.
Take Olshansky, 65 years old. A table on the standard life of the Social Security Administration suggests that he will live to 83 years. According to his own assessment – which includes a number of factors, including biomarkers – he is about to live in his 90s.
Calculators can give a more accurate reading, but the results can vary considerably depending on the methodology and inputs. Anyone who follows this path should stick to a calculator that gives results in the form of probabilities rather than absolute numbers, says Olshansky, who recommends the longevity illustrator of the American Academy of Actuaries.
Of course, life expectancy is only one element of longevity. The health period – the number of years that you will have to pass in relatively good physical and mental health – should also be part of the equation.
"People say that they want to live up to 100 years, but the number itself is less important than your health," says Olshansky. Indeed, health does not only determine the quality of life, it is one of the biggest jokers for retirement planning.
This is where facial analysis – along with other new technologies, such as saliva-based tests to detect longevity genes and other biomarkers – could offer a more nuanced view of lifespan. A new company, Wealthspan Advisors, is preparing to deploy a platform for advisors using the same technology developed by Olshansky and other researchers for the insurance industry.
Instead of simply asking clients how long they think they are living, planners ask a series of questions and take a picture of their client's face. From this photo, the program provides an estimate of both life expectancy and health, and illustrates the influence of lifestyle choices on these outcomes. "When you look young, you usually hear it age more slowly," says Olshansky, noting that the program is not fooled by makeup and aesthetic treatments.
Potential retirees should not rewrite their financial gaming book based on a single snapshot, but technology like this could provide a more accurate picture of planning.
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