Michael Finke, a professor at the American College of Financial Services, says he too has studied health and spending habits.
“The authors [of the Boston College study] make an important point about considering a client’s health when developing a retirement income plan," he said in an email to Financial Advisor. "In a recent research project, David Blanchett of PGIM and I estimate that investors in their 50s who believe that they are in poor or fair health have less than a 50% likelihood on average of living to the age of 75, while more than 80% of those in very good or excellent health lived beyond age 75. An overweight smoker with a heart condition can safely spend more in retirement than a client who watches what they eat and gets regular exercise. Generally, higher income Americans tend to be healthier, and they might be physically capable of spending more in old age.
"This also means that a safe withdrawal rate should also be partially determined by a client’s health," Finke added.