Investing for Retirement: Biological Age Versus Chronological Age


The traditional method for retirement investing is based on a person’s chronological age. However, with changes in how aging is perceived, consider using biological age to determine the amount of money needed for retirement.

Biological Age

What exactly is a person’s biological age?  First, let’s begin with chronological age.  This is the normal way to calculate a person’s age:  Current date minus the date of birth.  However, biological age does not apply to calendar time.  Instead, a person’s biological age can move forward or backward, adding or subtracting years to a person’s life.

With advances in technology, in the future, many people will be wearing technology that gauges particular vital statics to obtain a more accurate biological age rather than a chronological age.  A person’s biological age can be thought of as a clock that occasionally turns backward in time, adding days or even years to a person’s life.

Economic Decisions

Experts, such as York University professor Moshe Milevskya, argue that economic decisions should not be made solely on biological or chronological age, but a mixture of the two.  If a doctor informs a patient that they are currently at the fitness level of a 70-year-old, and that person is 85, the patient can celebrate.  However, if that patient is 50, they have cause to worry.  

Therefore, to accurately assess a retirement situation, make sound financial decisions pertaining to spending and withdrawals, and know how to invest, both a person’s biological and chronological age should be known.  This number is referred to as functional age.

How Biological Age is Determined

If biological age is so important, how exactly is it determined?  According to the Huffington Post, the aging process is determined by physiological and cellular changes.  These indicators can be revealed through a blood test that shows the risk of chronic diseases and dementia which are then compared to a person’s chronological age to determine a person’s well-being.

Everyone has met people they thought were older or younger than they really were.  If someone is in their 40’s, but they look as if they were in their late 50’s, their biological age is definitely older than their chronological age.  In addition, if someone is in their mid to late 40’s, but appears to be in their 30’s, they probably have a younger biological age than their chronological age.  Both of these individuals should plan for retirement differently.

Various lifestyle factors such as diet, exercise, and stress, can increase or slow down a person’s cellular aging rate.  Habits such as smoking, exercise, caffeine consumption, fatty foods, and overall body mass index (BMI) are used along with information obtained from plasma proteins in the blood to determine biological age.  

In addition to lifestyle choices, genetic factors such as high blood pressure, related non-communicable diseases, and cardiovascular diseases are considered in determining biological age.  As an added bonus, the particular blood test used to determine the proteins in the blood can also be used as an early predictor of Alzheimer’s disease since there is a direct link with biological aging and cognitive decline.

Molecular Indicators

The body and organs function differently in healthy and unhealthy individuals.  Aging is also linked to these changes.  When studied on a molecular level, aging is connected with a decline of telomere length, fluctuations in metabolic and gene-transcription profiles, and a different DNA-methylation pattern.  

In a study conducted by Swedish scientists, 77 plasma proteins in almost 1,000 individuals were studied.  This plasma protein profile can provide measurements such as weight, height, and hip circumference.  Lifestyle factors such as smoking, high BMI, and poor diet showed a person’s chronological can be shortened by 2 to 6 years.  

The Effect on Retirement

Once a person knows their biological age, then they can make decisions on spending and consuming.  Drawing down assets in a consistent and rational way in conjunction with their biological age is seen as wise retirement spending.  

A familiar spending rule for retirement is known as the 4% rule.  This rule is merely a recommendation on how much to spend at retirement.  Depending on a person’s age and the age at retirement, the amount of retirement savings spent can vary.  This amount can now be more accurately adjusted based on a person’s biological age instead of their chronological age.

Spend, Consume, or Draw-Down

A person, whether a retiree or pre-retiree, should find out their biological age if they don’t already know it in order to make decisions for retirement.  A properly estimated biological age is becoming part of the fiduciary process with financial advisers.  A medical questionnaire or a simple blood test can be useful in determining this important number.

Economic-Based Approach to Retirement

When determining retirement withdrawals and spending, a more economic-based approach is advised.  Since there is only a 5 in 100 chance of living to be 100 years old, a person must gauge how much of their retirement money they wish to save back for that likelihood.  There is a trade-off between spending more earlier in retirement and less later.  Knowing their biological age is just another piece of information that should help those planning their retirement.

To take a conservative approach to retirement, a person should look at a combination of their chronological age, biological age, and overall lifestyle expectations during retirement.  Using a combination of these indicators can help a person make better spending and consuming decisions before and after retirement.

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