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Longevity Risk Planning in Canada

Longevity risk planning is gaining importance as Canadians face longer retirements and the need to ensure their savings last. Financial planners utilize probability tables, health considerations, and emerging concepts like biological age to help clients prepare.

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Canada

HealthLabour MarketLifestyleFinanceRetirementRiskPlanning

Fp CanadaInstitut De Planification FinancièreCanadian Institute Of ActuariesStatistics CanadaManulife Financial Corp

Alexandra MacqueenBrenda HiscockMoshe MilevskyKaren Cutler

What is biological age and how is it influencing the field of financial planning?: The concept of "biological age", representing cellular aging, is becoming increasingly relevant in financial planning for high-net-worth individuals. It acknowledges that chronological age may not accurately reflect an individual's actual lifespan.
What tools and resources are available to help financial advisors assess longevity risk?: FP Canada and the Institut de planification financière provide annual projection guidelines, including survival probability tables, to aid advisors in longevity risk assessments. These tables offer a range of survival probabilities based on age and gender.
What is longevity risk planning and why is it becoming increasingly important for Canadians?: Longevity risk planning helps Canadians prepare for longer retirements by assessing the probability of outliving their savings. Financial planners use probability tables and consider factors like gender, health, and socioeconomic status to create personalized plans.
What are some of the key factors and considerations that financial planners use when creating a longevity risk plan?: While most financial planning software uses fixed horizons, FP Canada recommends planning to the 25% probability of survival. Advisors may also incorporate biological age and healthspan into their planning, considering factors like potential health declines and long-term care needs.
How are insurance companies and financial institutions using technology and data to improve longevity risk assessments?: Manulife Financial uses AI to analyze large datasets on health conditions and medical advancements to improve longevity risk assessments. This allows for better insurance rates for various client groups and consideration of previously challenging cases.

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