when couples are planning for retirement they often use a joint life expectancy this approach takes the life expectancy of their partner who may become the beneficiary of a retirement fund or pension plan into account as well as their own the irs provides tables to help you calculate joint life expectancy 4
most retirement plans including traditional roth sep and simple ira plans also use life expectancy to determine the implementation of required minimum distributions rmds for the plan most retirement plans expect participants to begin taking at least the rmd by the time they reach the age of 72 or age 73 starting in 2023 5 retirement plans base distributions on irs life expectancy tables some qualified plans may allow rmd distributions to begin at a later date 6due to an increase in life expectancy congress adjusted the required minimum distribution age from 70 to 72 in 2019 and again to age 73 starting in 2023 57your life expectancy is also a significant factor when arranging annuity payments with an insurance company in an annuity contract the insurance company agrees to pay a certain amount of money for a fixed period or until the policyholder s death it s important to take life expectancy into account when negotiating annuity contracts if you agree to receive payouts for a specific period you are essentially estimating how long you expect to live if you outlive this period you stop receiving money from the annuity you may also elect to use a single life annuity payment plan in which annuity payments will continue as long as you re alive if you re married you could use a joint life annuity that lasts as long as you or your spouse is alive 