How Long Are You Planning to Live?


Retirement planning is an exercise in longevity risk planning. Which means there is always a risk that you will outlive your savings. You have to make assumptions about what is going to happen to you, your family, financial markets, economic conditions and more over a long period of time.

Advances in healthcare and medicines are helping us live longer. The average life expectancy of an adult in the US is 77 years 1. Which means those who retire at the normal retirement age (NRA) of 67 are looking at funding ten years’ worth of living. But you might live longer than that. In February 2021 there were 97 thousand people in the US aged 100 or older2 – we have the highest absolute number of centenarians in the world. You could be one of them in a few decades time.

So how do we plan our retirement income if we don’t really know how long we will need it for?

Well, you need to look at it from both an income and expenses perspective

Manage Your Income

On the income side, there are strategies that can be used to adjust financial tools in a way that reduces the longevity risk of your investments. These can include:

  • Adjusting the underlying asset
  • Resetting the asset allocation
  • Adjusting the income that is drawn out of the investment

An experienced financial professional can walk you through how this could work with your specific portfolio.

Another alternative is to push out your retirement age. With impro'{ed health and living standards many people are opting to remain in the workforce beyond the official retirement age, which means they are earning an income, saving, and growing their investment for longer before they need to start drawing on them

There are also other options for transitioning out of your career but still making an income – you could get a casual job at the golf course or local library, or even start your own business. There will be implications for things like benefits and tax, so make sure you discuss your options with your financial professional.

Plan Your Expenses

On the expenses side, the first thing to do is get a clear picture of the expenses you are likely to incur during your retirement years. Did you know healthcare can be one of the biggest expenses in retirement? According to the Fidelity Investments Retiree Healthcare Cost Estimate3, a couple who is 65 years old and retired in 2021 could expect to pay $300,000 in healthcare and medical expenses throughout retirement

Make sure you drill down into all those extra discretionary (non-essential) expenses like restaurants, spa treatments, sports equipment, and day trips – they all add up

The next step is to factor in increases in these costs over time. Some of the changes you need to consider include

  • Changes to tax rates – the tax brackets are always subject to change, and you could be looking at having to pay much higher income taxes while still earning the same income
  • Increasing healthcare costs – healthcare costs are constantly increasing, from insurance premiums to out of pocket expenses, but as we age, we are also more likely to need extra healthcare
  • Inflation – the cost of many variable expenses like food, clothes, travel, and entertainment will increase over time

A financial professional should be able to guide you with strategies over time for common costs like tax rates, healthcare, and inflation.

Truth is, none of us know how long we are going to live. And none of us want to run out of savings and income part way through out retirement. We don’t want to burden our families. We want to enjoy our retirement without financial worry.

That is completely achievable. Having helped couples and families make their retirement ambitions a reality for over thirty years, I have seen it all. Consider booking a Complimentary Retirement Planning Session, my goal is to help you navigate into a rewarding and enjoyable retirement.

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The information is not intended to be used as the sole basis for financial decisions, nor should it be construed as advice to meet the particular needs of an individual’s situation. Neither the firm nor its agents or representatives may give tax or legal advice. Individuals should consult with a qualified professional for guidance before making any purchasing decisions. Guarantees and protections provided by insurance products, including annuities, are backed by the financial strength and claims-paying ability of the issuing insurance carrier.

Investment advisory services offered only by duly registered individuals through AE Wealth Management LLC (AEWM). AEWM and Life Design Financial are not affiliated companies. CA Insurance License #0B075169. 1217977-02/22

  1. National Center for Health Statistics, 2020, Deaths and Mortality, Centers for Disease Control and Prevention, viewed 31 Jan 2022,
  2. Katharina Buchholz, 2021, There are now more than half a million people aged 100 or older around the world, World Economic Forum, viewed 31 Jan 2022,
  3. Rebecca Lake, 2021, How to Plan for Medical Expenses in Retirement, Investopedia, viewed 11 Mar 2022,

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