Jay Jackson
Chairman & CEO
In my continued quest to dispel financial planning myths, I’ve been focusing recently on something most people don’t realize: the mortality tables that run the entire financial services industry are fundamentally broken.
Every major financial institution relies on the same set of mortality tables: VBT tables (Valuation Basic Tables). Your bank uses them. Your insurance company uses them. Your financial advisor uses them. They’re the industry standard.
And they’re essentially throwing darts at a board.
Here’s how broken they are: VBT tables have four categories. Male or female. Smoker or nonsmoker. That’s it. That’s the entire basis for projecting how long you’ll live.
The smoker data? Self-reported. Which means when you look at the tables today, they show remarkably few smokers. But 20-30 years ago, roughly one-third of the population smoked. People lied on their forms (or were honest but the underwriting was loose). So the tables are modeling a world that never existed, based on data that was never accurate.
The tables also end at age 95. People regularly live past 95. In fact, we have more centenarians alive today than ever before. But the actuarial models stop there, forcing financial advisors to extrapolate on data points that don’t exist.
Think about what that means: A 65-year-old trying to plan for retirement is relying on mortality assumptions that end 30 years before we know people live. That’s not planning. That’s guessing.
The real problem isn’t just the tables’ limitations. It’s what they completely miss. They don’t capture underlying disease, chronic conditions, medication profiles, genetics, biometrics, lifestyle factors. They don’t distinguish between two 70-year-olds—one with perfect health and parents who lived into their 90s, the other managing diabetes, hypertension, and autoimmune disease. They’re just “70-year-old, male, nonsmoker.” So everyone gets the same financial plan.
That’s not precision. That’s the industry hoping for the best.
This cascades through everything. Withdrawal rates are based on the 4% rule—derived from these broken tables. Asset allocation strategies assume population-level longevity. Social Security claiming decisions ignore individual health trajectory. Life insurance valuations use broad categories instead of actual risk profiles.
It’s like everyone in America uses the same weather forecast, regardless of where they live.
This is why lifespan data matters. Not population averages. Not actuarial tables from decades ago. Your actual data. Your medical history, your conditions, your genetics, your health trajectory. The real picture of how long you’re actually going to live based on your specific situation.
When you know what’s driving longevity for your specific case, everything downstream changes. Asset allocation changes. Withdrawal strategy changes. Social Security timing changes. Insurance strategy changes. It’s not a small adjustment—it’s the difference between a plan built on guesses and a plan built on facts.
The industry can finally stop hoping for the best and start planning based on reality.
