Prepare Your Finances For Living To 100

The women of Kensington and Chelsea are terrifying demographers. If we aspire to be like them, we could leave an impossible bill for younger generations.

According to the Office of National Statistics, men living in the local authority of Kensington and Chelsea can expect to live to a robust 82.2 years, whereas men living in Glasgow City will boom-and-bust at age 69.9. Women in Glasgow defy their smoke-filled lungs for several more years and survive till 76.7.But the women of Kensington and Chelsea laugh at death. Young ladies there can now expect to survive to 86.2. From a financial perspective, these women are terrifying. Should we all start living as long as this, it'll mean we'll need much larger retirement pots. If we fail to save more, it may put an impossible bill on younger generations.In terms of retirement, these life expectancy figures of 69.9 to 86.2 are too low. The average life expectancy is pulled down by all sorts of nasties that kill people off early. This means that if you've survived past your forties your life expectancy shoots up.Furthermore, according to the Department of Work and Pensions, centenarians are the fastest growing demographic group. The Queen can't write letters fast enough. As more diseases are cured, healthcare improves, and other advances are realised, our lives will continue to get longer. It could take just one major advance to increase our life expectancy by a decade or more.Let's take a look at how staggering the effects of such an advance could be. Pension annuity providers Friends Provident told me that they estimate a non-smoking man who has already managed to live to 65 could expect to live another 23 years to 88 and a woman could live another 26 years to 91, a difference of three years.If they both have a pension pot of £300,000 plus the full basic state pension, that might give the man an inflation-linked (i.e. it rises with the prices of goods and services) pension income of £18,800 with Prudential. The woman would get just £17,250. Therefore a difference in life expectancy of three years reduces the woman's income by £1,550 a year. In order to make up the difference, the woman would need another £36,000 in her pot: a total of £336,000.Using these figures, we can work out the difference that even longer lives might make to our pension incomes. If we add on another 9 years for a woman and 12 years for a man to make life expectancies of 100 years, we'd all need pots well over £400,000 in order to get £18,800.Of course, it probably won't be quite this simple, but it does show that we need to think seriously about the effect of longer life on our future finances.What can we do to boost our retirement funds?There are two things we can do now to boost our retirement funds. Firstly, we can live below our means and put more away for the future. The earlier we do this, the better. I worked out recently that delaying your pension for a year might cost you £64,000. (Read more in Miss A Year's Pension Contributions And Lose £64,000!)Secondly, we can change our attitude towards work. I'm going on the assumption that I'll be retiring at 68 or even later, so I don't feel despondent about working longer should the need arise. Besides, if the man from the Pru hangs onto his job until he's 70 he'd get an extra £3,600 per year, and the woman from the Pru would get another £3,000, simply because their pots won't have to last them as long.Related articlesSaving earlier is ludicrously cheaper in the long run. Read about it in The Miracle Of Compounding!If you're retirement day is many years away, don't forget to take into account the effects of inflation. Read We Need £1m To Retire Comfortably.> Visit our Money Saving Tips bridging page and pick up great ideas to help you live below your means.