Forget Your Real Age, Plan Your Retirement Around Your ‘Biological Age’
Lewis Braham
January 27, 2019

Measuring so-called “biological age” could have a dramatic impact on retirement planning strategies, and on public policy. Here’s what you need to know.
Suppose your parents and grandparents all died in their sixties from poor health—not from smoking or obesity, but just bad genes. Would you listen to a financial adviser who told you to delay taking Social Security until age 70 because you’d receive a bigger monthly benefit?
Maybe not.
Now suppose you’re in perfect shape and you have more than one centenarian relative. Should you believe an adviser who analyzes your portfolio, then tells you not to worry about saving enough for retirement based on his assumption that the average age of mortality in the U.S. is 79?
Of course not.
“Your true age is not the number of years you’ve circled the sun,” says Moshe Milevsky, a professor of finance at York University in Toronto. “Your true age is determined by your body and scientists are working very hard how to measure this thing called biological age.” Your biological age is your age defined by how healthy you are, not how long you’ve been alive. Thus, one could be chronologically 60 years old, but biologically 50 years old—or vice versa.
There are numerous ways of measuring biological age, but scientists, Milevsky argues, are becoming increasingly accurate in their life expectancy predictions based on it. “You will have [life expectancy prediction] accuracy of a couple of years, not decades,” he says, noting that life insurers already employ a version of biological age when underwriting customers. Milevsky is the author of the forthcoming book “Longevity Insurance for a Biological Age,” in which he describes retirement planning using biological instead of chronological age.

Measuring biological age could have a dramatic impact on public retirement policy. Consider that low income Americans have shorter life expectancies than middle class and wealthy Americans. The life expectancy gap between the poorest 10% of Americans and the richest 10% is more than 10 years. Should the age for Social Security eligibility really be raised when so many poor people are at a disadvantage? Or should any adjustments be based on biological age, allowing the poor to receive their benefits earlier?
“There are going to be winners and losers using biological age, but the winners are the people we’d like to win,” Milevsky says. “These are people who shouldn’t have to wait till 70 to get their pension. They’re not going to make it to 70. The losers are those whose grandparents lived to 110.”
Such a change would also rejigger your asset allocation plan. Say you lost thirty pounds, quit smoking and started eating healthier food. Milevsky thinks you should adjust your retirement expectations for a longer life, effectively lowering your biological age. That would mean shifting your allocation to more stocks and fewer bonds, taking on more risk for greater returns to cover your retirement costs.
Having a lower biological age than your chronological one also could mean working longer before retiring and changing your insurance policies. You should reduce your life insurance coverage if you expect to live longer, and instead buy a lifetime income annuity—an insurance product where if you put down a lump sum up front, you are guaranteed a certain income for life. The lower your biological age, the better a deal such annuities will be.

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