You saved, you stopped working, and your pension and Social Security carried you through. The math was simpler because the timeline was shorter.
That timeline has changed. Today, a healthy 65-year-old couple has a nearly even chance that one of them will reach 90. Some will live well past that. Retirement is no longer a decade-long chapter. For many, it will last 25 to 30 years or more.
The financial industry responded to longer lives by encouraging people to save more and invest better. But saving more doesn’t solve the fundamental problem: nobody knows exactly how long their money needs to last. That uncertainty, the risk of outliving your financial resources, is called longevity risk. And it’s the most underaddressed challenge in retirement planning today.
You saved, you stopped working, and your pension and Social Security carried you through. The math was simpler because the timeline was shorter.
That timeline has changed. Today, a healthy 65-year-old couple has a nearly even chance that one of them will reach 90. Some will live well past that. Retirement is no longer a decade-long chapter. For many, it will last 25 to 30 years or more.
The financial industry responded to longer lives by encouraging people to save more and invest better. But saving more doesn’t solve the fundamental problem: nobody knows exactly how long their money needs to last. That uncertainty, the risk of outliving your financial resources, is called longevity risk. And it’s the most underaddressed challenge in retirement planning today.
Where most plans focus.
65
70
75
80
401(k)s, IRAs, and portfolios are designed for this phase.
Social Security and pensions anchor early retirement spending.
Flexibility to course correct. Inflation is present but still manageable.
The later decades — where most plans fall short.
80
85
90
95
Portfolio balances shrink while the need for income continues.
Healthcare, long-term care, and assisted living can consume savings rapidly.
After twenty years of compounding, every dollar buys significantly less.
Nearly 50% of couples age 65 will see one spouse reach 90 or beyond.
Research shows retirees spend 80% of income streams but draw down far less from savings.
How do you make retirement income last as long as life does? Longevity Finance starts where traditional planning stops, at the point where savings are drawing down, costs are rising, and the tools most people rely on weren’t designed to reach.
The later decades of retirement, where plans are least likely to have been stress-tested.
Wealth accumulation and early retirement distribution.
Time. How long retirement actually lasts drives every decision.
Returns. Portfolio performance drives the planning model.
Planning that accounts for the years when savings are drawing down and costs are rising
Withdrawals drawn from portfolio balances over time.
Plans for the possibility of reaching 90, 95, or beyond.
Often built around average life expectancy as the endpoint.
Recognizes that uncertainty about lifespan is itself a barrier to spending in retirement.
Portfolio balances that retirees frequently underspend out of fear.
The later decades of retirement, where plans are least likely to have been stress-tested.
Time. How long retirement actually lasts drives every decision.
Planning that accounts for the years when savings are drawing down and costs are rising.
Plans for the possibility of reaching 90, 95, or beyond.
Recognizes that uncertainty about lifespan is itself a barrier to spending in retirement.
Wealth accumulation and early retirement distribution.
Returns. Portfolio performance drives the planning model.
Withdrawals drawn from portfolio balances over time.
Often built around average life expectancy as the endpoint.
Portfolio balances that retirees frequently underspend out of fear.
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If you’re approaching retirement or already there, and you’ve wondered whether your savings will truly last, you’re not alone. Longevity risk is real, it’s common, and it can be planned for. The best next step is a conversation with a financial advisor who understands the challenge and can help you build an income approach designed for a longer life.
