Planning for Longevity in Retirement

By Brent Meyer — SafeMoney.com Founder & Editor Reviewed by Licensed Financial Professionals  |  SafeMoney.com — Trusted Since 2011  |  Updated Regularly Quick Answer: Learn how to plan for longevity in retirement with safe money alternatives to secure your financial future. Explore options today! Good news: People are living longer. But with increasing lifespans comes greater financial risk, like outliving your retirement money or facing costly health expenditures. Planning for longevity in retirement has become crucial. Decades ago, many Americans worked for the same company for years, often receiving a defined-benefit pension. Then, they shifted into a comfortable post-work lifestyle. However, times have changed. Retirement could now last 20-30 years, or even 40 years! This brings the challenge of preparing financially for an extended post-work lifespan. Here are some quick tips to help you plan. How Quickly Has Longevity Evolved? Life expectancy statistics paint a compelling picture. In 1900, life expectancy rested a little north of 47 years. Over the next 28 years, it gradually increased, as the graph illustrates below.   From there, life expectancy takes a drastic, upward surge. In 1950, it was 68.2 years. By the end of the 20th century, it increased to 77 years – a 30-year gain in just a century. Historically, this was an unprecedented leap forward in quality of life improvements – and the rapid pace at which those gains arose was equally historic.   In 2015, life expectancy reached 78.8 years. The point is quality of life standards have evolved rapidly. This raises the question of how we can prepare to live longer, and live comfortably, moreso than our predecessors did. It’s certainly an interesting question as long-term retirement planning models continue to evolve, and one we should consider as we discuss ways to plan for longevity, below. Steps to Prepare for Longevity in Retirement Look past life expectancy. When planning for retirement, what should you use as an age benchmark? The problem with life expectancy is it’s just an average. It’s an estimate of how one-half of people will pass away before attaining it, and the other half will exceed it. Financial planning for up to an older age in retirement is definitely a prudent tactic. An age benchmark that financial professionals are increasingly turning to is probability of reaching select ages. In a survey commissioned by InvestmentNews, advisors reported