What age should I plan to?
Many planners use an age in the 90s so the plan still works if you live a long time. Your health and family history may point higher or lower.
Market and longevity risks
What Is Longevity Risk in Retirement?
Longevity risk is the chance that you live longer than your money lasts. Nobody knows how long they will live, and averages hide a lot: many people live well past average life expectancy. A plan built to run out at 85 can leave you short at 92. Planning for a long life, not an average one, helps protect against this risk.
Written and reviewed by Dan Hopwood, Retirement Income Specialist · Retirement Income Knowledge Center
Why averages can mislead
Life expectancy is an average. About half of people live longer than average, some by many years. If you plan to spend your savings over your average life expectancy, you have a real chance of outliving that plan.
Social Security's life expectancy calculator gives a starting estimate based on your age and sex. Your health and family history matter too.
Couples face a longer time frame
For a married couple, what matters is how long the second spouse lives. The chance that at least one of two people reaches an advanced age is higher than for either person alone, so couples often need income to last longer.
How a longer life changes the math
Illustrative $2,000 / month drawn from savings
- If needed from 65 to 85 (20 years)
- $480,000 total
- If needed from 65 to 95 (30 years)
- $720,000 total
Illustration only. Ignores growth, inflation and taxes to show how extra years add up.
Common ways to plan for a long life
- Delaying Social Security, which increases a lifetime, inflation-adjusted benefit.
- Choosing survivor options on pensions so income continues for a spouse.
- Using annuity income that is guaranteed for life by an insurance company.
- Keeping withdrawals from savings at a level that can last into your 90s.
Talk it through in a free Retirement Income Review
Every household is different. In a free, no-obligation 30-minute review, a licensed insurance professional can walk through your income sources and questions with you.
Schedule a Retirement Income ReviewFree • No obligation • About 30 minutes
Common questions
Is longevity risk only about money?
Mostly, but a long life also brings more years of inflation and often higher healthcare and care costs, which make the money question bigger.
Which income sources protect against longevity risk?
Income paid for life does: Social Security, many pensions and lifetime annuity income. Savings alone can run out.
What are the odds I live into my 90s?
It is more common than many people expect, especially for one member of a married couple. The Social Security Administration publishes life-expectancy estimates you can check for your own age. Planning only to average life expectancy leaves roughly half of people outliving the plan.
How can I make sure I don't outlive my money?
No approach removes every risk, but people commonly reduce longevity risk by delaying Social Security, keeping withdrawals modest, and covering essential spending with lifetime income such as a pension or annuity. Annuity lifetime guarantees are subject to the claims-paying ability of the issuing insurance company.
How should I plan if I might live to 95 or 100?
Planning to a later age means your income has to last longer and keep up with prices for more years. Lifetime income sources such as Social Security and some annuities keep paying no matter how long you live. Testing your plan to age 95 is a common stress test.
What if one spouse is likely to live much longer?
Plan for the survivor's income, not just the couple's. A surviving spouse often loses one Social Security check and may see a pension shrink. Joint-life income and survivor choices help address this.
How do long-term care costs affect retirement income?
Care needs can add large expenses late in retirement, often when savings are smaller. Medicare generally does not pay for long-term custodial care. Many people plan for care costs separately so they do not crowd out everyday income.
Authoritative sources
This page is educational and general in nature. RetirementLeverage™ and Retirement Planning Store, Inc. do not provide individualized investment, securities, tax, or legal advice; please consult a qualified tax professional or attorney about your own situation. Insurance products and services may not be available in every state, and any guarantees are subject to the financial strength and claims-paying ability of the issuing insurance company.