The costs associated with living to old age are often misunderstood and, almost without exception, understated. And, given the relatively long time horizon over which these costs are considered, we need to appreciate how they may change over time. Would you like to know what it will cost you as you age? Then join us to help create a longevity calculator that we can all use.
Longevity Calculator: The Cost of Living To 100
Ultimately, the cost of living to 100 depends on our choices regarding our current and future lifestyles. Costs include:
Housing
This is inevitably the most significant cost most people will incur over their lives, whether it be through mortgage payments or monthly rentals.
Living expenses
While choosing a house might be a once-off decision, our living expenses are typically daily or weekly.
Healthcare
Typical healthcare costs include medical-aid contributions and ancillary insurance products, such as gap and hospital cash plans. However, quite often, over and above these standard monthly costs, we find ourselves having to make additional out-of-pocket payments for healthcare.
Transportation
Transport costs will include items such as vehicle repayments, vehicle insurance, petrol, and vehicle maintenance.
Children/dependents
The cost of raising children is a point of nervousness for many parents. There are several factors to consider. These include, but are not limited to:
- Number of children raised;
- The duration that children remain dependents;
- Cost of care workers, whether domestic helpers/nannies or au pairs;
- Cost of elementary education;
- Cost of junior and high-school fees (noting the difference in cost between public and private schooling);
- Cost of extramural activities; and
- Cost of university fees (noting the difference in cost between local and international university fees).
An interesting emerging nuance that needs to be considered in planning is the cost associated with any additional dependents, including parents and extended family members.
Entertainment
Entertainment costs can vary significantly from person to person and may encompass TV subscriptions, dining out, and holidays.
Other expenditures
Over and above the plannable and predictable expenses noted above, we incur several other ad hoc expenses. This includes electronics, gifts, watches, etc.
How do you provide for the cost of living?
Typical sources of funding for living to old age include:
- Monthly salary while in active employment, although a monthly salary is primarily used to cover current expenditures; it’s often necessary to save a portion of current monthly earnings to fund expenses in the future.
- The two typical mechanisms to fund future income from current earnings are pension-fund contributions, and savings and investments.
The Longevity Calculator Starts Here
Longevity has teamed up with Insight Actuaries and Consultants to create THE LONGEVITY CALCULATOR. This is a project we are developing that needs participants.
By participating in our LONGEVITY CALCULATOR SURVEY, you’ll be able to access a plan to understand what it will take financially to live past 100 and manage your costs as you age.
Insight Actuaries and Consultants is a health-focused actuarial consultancy in South Africa and Australia, blending over a decade of healthcare financing and analytics expertise with a passion for data-driven solutions. Its multidisciplinary team, leveraging advanced technology, delivers analytics and strategic advice across Life, Health and Advisory Solutions divisions. By integrating real-world data with innovative tools, Insight offers market-leading solutions to complex challenges.
Sign up for our survey
Sign up here. If you wish to participate in our Longevity Calculator project. Email us: [email protected] and we will add you to our research list.
