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Retirement Lifespan Estimation Tool: Weibull Distribution Analysis for Effective Planning

This project presents an Excel model to estimate expected remaining retirement lifespan, using publicly available National Vital Statistics Reports data. The methodology includes survivor function modeling with Weibull distribution analysis and a cubic polynomial fit. The Excel interface provides an accessible tool for retirement planning.

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Retirement Lifespan Estimation Tool: Weibull Distribution Analysis for Effective Planning

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  1. SMRE Spring 2008 ProjectAn Excel Model to Estimate Expected Remaining Retirement Lifespan By Bruno Trenkler SMRE Spring 2008

  2. Introduction • Need a simple tool to calculate expected remaining life for retirement planning. • Available Tools • Web based estimators • Web based tables • Uses publicly available data for • Total Population • Whites • Males • Females • Blacks • Males • Females SMRE Spring 2008

  3. Methodology • Data source is: National Vital Statistics Reports, Vol 54, 14, April 19, 2006 (Revised March 28, 2007) http://www.cdc.gov/nchs/data/nvsr/nvsr54/nvsr54_14.pdf SMRE Spring 2008

  4. Survival Plot SMRE Spring 2008

  5. Attempts to Model Survivor Function • Distribution Analysis • Weibull (coeff = 0.976) • 3 parameter Weibull (coeff = 0.985) • Transformations • Manual • Log, Log-Log, √ , inverse √ • Box-Cox • Polynomial • 6th order provides R2=0.9999 SMRE Spring 2008

  6. Mean Expected Life SMRE Spring 2008

  7. Cubic Polynomial Fit SMRE Spring 2008

  8. Expected Remaining Life Excel Interface SMRE Spring 2008

  9. Polynomial Model vs. Data SMRE Spring 2008

  10. Conclusions • Modeling survivor function difficult • Cubic polynomial gives good results • Excel program results are acceptable SMRE Spring 2008

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