Many Swedish savers will live longer than they think, which could leave some facing a shortfall in their retirement income, analysis from the Swedish Pensions Agency (Pensionsmyndigheten) has found.

The report, the fourth in the agency's mortality series, pointed out that while women and men turning 66 in 2025 have an expected average life expectancy of 88.7 years and 86.7 years, respectively, measured as a median, life expectancy is "clearly higher".

This is because the median life expectancy relates to the age to which exactly half of people are expected to survive, while the average life expectancy takes account of the fact that some people die well before the average age.

This means that those who have already survived to retirement age can underestimate their life expectancy.

Indeed, Pensionsmyndigheten emphasised that one in two women who are currently 66 years old is expected to live to their 90th birthday, while the corresponding median life expectancy for men who are currently 66 years old is 88.5 years, which is also a higher life expectancy than if measured as average life expectancy.

"I think that few people know their median life expectancy and that many probably underestimate their own lifespan," Pensionsmyndigheten actuary, Linda Perkiö, said.

And this could have a knock-on effect for retirement savings, as Pensionsmyndigheten chief actuary, Erland Ekheden, said that some could face "years of living without an occupational pension" if they choose to draw it for a shorter period of time, instead of taking a long-term approach.

"Thoughts about longevity often come to mind when you start thinking about retiring or whether you want to work for another year," Ekheden stated. "There are never any guarantees at an individual level, but it can be helpful to know that half of your peers are expected to live to the age of 90.

"Median lifespan rather than average lifespan is also a good thing to keep in mind when you log in to pensionsmyndigheten.se and see your pension forecast, not least for those who are considering drawing their occupational pension for a shorter period of time."

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