It is not our intention to complicate matters with convoluted mathematical anomalies but…..

We have to address the elephant in the room.

Lifespan and healthspan figures commonly quoted by officials, of one sort or another, are averages. And in this respect we can easily get dragged into the fact that even an average is a fairly generic term, which could bring us onto modes, medians and means.

 

The average figure varies depending on whether it is the mean, the median or the mode. Normally the figure quoted is the mean average.

This matters, because unless you know the figures across all the averages you can’t get a proper understanding of the ‘skew’.

The skew is how much the distribution varies around the mean and whether the distribution is skewed to the left or to the right.

 

The median and the mode help, to some extent, to explain the skew.

 

The distribution around the mean is actually very significant and this leads to the simple observation that it is easy to underestimate (or in some cases over estimate) your individual risk.

When it comes to financial planning, for example, you could easily look at a figure of age 84, if you are currently age 65, and recognise this as your expected lifespan.

 

Because of all 65 year-old’s on average the age of death is expected to be 84.

 

However that includes all age 65 year old’s, the most healthy, the fittest, the luckiest, as well as the less well off, those who are in very poor health and those who will be unlucky.

 

If you are average in terms of health and fitness, the ‘lottery of life’ means you would want to know how likely it is you will live to, say, 95.

How many 65 year old’s live to 95?

 

There could be three 65 year old’s who end up living to: age 66, age 91, age 95 – that group has a mean average of 84. One who lives to 95, so 1 in 3.

That distribution is “skewed” to the right (meaning that two people live longer and one not as long as the average, hence there is more to the right of the average than to the left).

 

If you plan your finances to live to age 84, then you have 11 years of neglect if you were the 1 in 3 who live to age 95.

So, you wouldn’t pay any attention to the mean, you would want to know the figures relating to all the averages and the skew and distribution to get a real feel for your prospects.

On the other hand,

 

if you are a government minister or the head actuary of an insurance company, you have very little interest in the individual prospects, you are very interested in the population average (assuming you have enough people or customers).

 

The skew/distribution is still of use and interest, but essentially you could develop policy, crunch numbers and make very accurate predictions, based on the mean averages.

 

Your chances of living a long time and your chances of having a long period of ill health in the period after you get to 50, are probably not indicated accurately by your lifespan and healthspan figures as taken from the mean averages so often quoted.

 

And that is for the simple reason, that you – as an individual – are unlikely to have the mean average experience.

You cannot ever know what your precise prospects are, but you can tailor everything you do and how you organise your lifestyle and fitness regime, and your finances, in such a way that you maximise your prosects to be in the right part of the distribution around the mean. 

 

You can effectively change your odds.

 

We know this from all the research. And the surprising thing is how much you can change the odds.