Your Healthy Life Expectancy is More Important Than Your Life Expectancy

When planning for retirement people often make the mistake of using their life expectancy as a guideline for how much to save and invest. Worse, these same people plan their retirement years with the same life expectancy yardstick.

Every retiree advanced in years will tell you there is no race to the finish. There is a slow decline from middle age with an acceleration of deteriorating health at some higher age.

I learned this recently when my dad passed. Kids often view their parents in a different light because they were always there in their life.

My parent once owned a RV type camper, one of those homes on wheels attached to the truck with a fifth wheel. Every winter they would travel to Mississippi to visit friends. Then one year they decided not to go. Then the RV was sold. Then my parents stopped travelling at all, even bus tours.

Dad had both his knees replaced and the aches and pains were serious. He was still able to get around, but the quality of life was low and dropping.

Twelve years ago he had his first stroke. Nothing super serious, but concerning. He had to be careful driving. Eventually he spent more time watching old westerns on TV. All that sitting did not improve his health.

Then the last stroke. My dad was lucky. It went fast. But buried in all these events is a powerful personal finance lesson.

Life Expectancy

Years ago I came up with a life analogy. In my worldview we are all standing in a line. With each death we take a step forward in the line. When my grandparents died I knew I was stepping forward in this imaginary line. When my dad passed I realized I was now standing at the front of the line and it scared the bejesus out of me.

My fear wasn’t about death. It was something more.

It was clear my dad declined over the years. Things he loved doing were curtailed and then off limits.

My mother and father had a 60 year marriage and they got along well. They had dreams. They travelled a bit. Mostly they landscaped 15 acres into the most fabulous personal park you ever would see.

Still, time kept count. My dad hired people to help with the upkeep of the gardens and pathways. He literally fell off the riding lawn mower once when he had a stroke.

In 2022 the life expectancy in the U.S. was 74.8 years for a male. My dad made it to 78 years, 2 months, 5 days. He beat the odds.

Or did he?

Healthy Life Expectancy

You see, long before my dad died something happened. Medical issues limited my dad’s ability to enjoy many things in life. Long before his 78th birthday he was already denied extended travel or long hikes or a full day working in his gardens.

Death is a clear line of demarcation. There is another, not so clear, line everyone will cross unless an accident takes their life.

This other line is called the “healthy life expectancy.” Your healthy life expectancy age is that point in life where medical issues, disease, or disability, take away your ability to live life at the fullest.

And this is where is gets scary. My dad lived to 78, but the last five to seven years were not filled with all the activities he enjoyed. First travel was limited, then avoided. He was able to work on his yard, but he was not able to add new projects that were always floating is his head.

Years before my dad passed, his healthy life expectancy date took hold.

The Importance of Now

In my younger days I railed against early retirement. In my worldview you love your work and want to do it. (Said like a true self-employed individual.) However, I travelled as much as I wanted and controlled my schedule. That makes a big difference.

Working in corporate America rarely allows for such freedoms. Loving what you do requires two parts. First, you either have to love the processes and routines of the tasks you call work, and you need some form of control.

If your work schedule is dictated by fiat from above, the love you feel for the work you do will feel strain. I understand the strong pull of retirement people working in the corporate culture feel.

The self-employed often do the opposite. They love their business so they work at it forever. Or at least until disease or disability prevent them from running their business.

In either case, the corporate world or self-employment, it is a mistake to think you have more time to enjoy your golden years.

Yes, you might expect to live 10 or more years, but how well you enjoy those years is the real question. At some point you will be alive, but not able to take that trip of a lifetime or participate in certain activities.

Waiting until traditional retirement age is a massive mistake! Yes, you are expected to live another 10 years, closer to 15 years for females, if you retire at 65, but will you enjoy those years or sit in a chair waiting for the Grim Reaper to collect his prize?

The cold truth is your final years will be unhealthy, where disease or disability limit your activities. Nothing is more important than to live life now, while you can. Tomorrow may never come.

But it is much worse than you think.

The Declining Healthy Life Expectancy Age

Not only are life expectancies climbing around the world, so is the healthy life expectancy. Except in a few places, most notably the U.S.

Venezuela and Yemen saw their healthy life expectancy age decline since 2010. War and civil unrest explain why this is so.

But America!

Of the three places on earth that saw a consistent decline in healthy life expectancy since 2010, the U.S. is the only developed nation on the list.

Jeff Nobbs did deep research on healthy life expectancy around the world. He focused on the U.S. because it is such an outlier.

We can debate the reasons the U.S. is at the bottom of the list of developed nations for healthy life expectancy. Drug use and the lack of universal health care is shortening the lives of Americans and cutting an already low healthy life expectancy. We do see an increasing amount of time for Americans spent in disease and disability, limiting activities. Clearly, quality of life is suffering for elderly Americans.

The healthy life expectancy is 66.1 years in the U.S. If you wait until 65 to retire you have, on average, a year to enjoy it. With Social Security full retirement age climbing to age 67, the average American will be in poor health the entire time they collect Social Security. If that doesn’t bring a lump to the throat, I don’t know what will.

Life expectancy is climbing in most places around the world. So is the healthy life expectancy. Except in America. We are at the bottom of the list of developed nations for healthy life expectancy and the number of healthy years is declining.

I encourage better life habits to beat the averages. We can see from other developed nations more healthy years are possible. Drug use and smoking are habits you must quit. Same for excess consumption of alcohol. Aerobic and strength exercises are a vital part of a healthy lifestyle. We also need to eat better.

Regardless, no matter how clean a life you live, your healthy life expectancy is always lower than your actual life expectancy. You will die. The real question, however, is how long before you die will your life activities be limited?

When planning financial wealth you need to consider all factors. Plan with taxes in mind. Plan for all years. Think about your legacy and what resources you will leave your children.

Also consider your personal goals. Are there places you want to travel, experiences you want to live? Want to hike a difficult trail? Climb a mountain? Plant a tree? See the natural wonders on the other side of the world?

Then you need to be thinking in healthy life expectancy terms over life expectancy. Long before you depart this world you will be robbed of these dreams. Live them now while you can. If you don’t, you will have several years to reflect on your regret.

My tax practice is 80% smaller than it was 20 years ago. By design, I shrunk the size of my practice at a steady rate. If you are a business owner you will need to consider the same strategy at some point. You may sell your business or bring on partners. In either case, if you plan on enjoying your life to the max you will need to free time for such activities.

I was a mere 40 years old when I started to plan my landing. I love my work and will likely be involved in it to my dying breath. I don’t need to run at full throttle, however. I travel several times per year; first class, I might add. I spend ample time with family. I live life every day. And I have the time to do it! That is the benefit of running my own business.

Those without their own business can cut back their hours or change employers. Maybe a side hustle is a better choice than corporate America at some point.

In either case, pay off all debts! Save and invest those excess funds. The sooner you build a solid liquid net worth the sooner you can chart your own path. You don’t have as many years left as you think. Now is the time to start. The clock is ticking and there is less time on the scoreboard than you thought. This is a crisis that needs your attention now.