Calibrating Gompertz in reverse: What is your longevity-risk-adjusted global age?

Area of Science:

• Demography
• Actuarial Science
• Gerontology

Background:

• Heterogeneous populations exhibit varying mortality rates, challenging traditional age-based policies.
• Existing mortality models may not fully capture individual longevity risk.
• Chronological age does not accurately reflect an individual's remaining lifespan or associated risks.

Purpose of the Study:

• To develop a computational framework for calculating a longevity-risk-adjusted global (L-RaG) age.
• To calibrate and illustrate L-RaG age using international mortality data.
• To explore the implications of L-RaG age for retirement policy and behavioral economics.

Main Methods:

• Inversion of Gompertz-Makeham mortality hazard rates.
• Application of compensation laws of mortality for heterogeneous populations.
• Calibration of L-RaG age using country-specific data from the Human Mortality Database (HMD).

Main Results:

• Demonstrated significant variation in L-RaG age across different populations (e.g., Swedish vs. Russian males).
• A 55-year-old Swedish male has an L-RaG age of 48, while a 55-year-old Russian male has an L-RaG age closer to 67.
• Established a connection between L-RaG age and Biological age.

Conclusions:

• The L-RaG age provides a novel metric for assessing longevity risk.
• This metric has practical applications in pension and retirement policy, especially with increasing mortality heterogeneity.
• L-RaG age can enhance public understanding of lifetime uncertainty, potentially influencing retirement decisions.