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  • Writer's pictureKyle Rolek, Retirement Planning Specialist

The Impact of Longevity on Retirement Planning

Updated: Oct 18, 2023

For those who are on the cusp of retirement, the prospect of a longer life expectancy brings with it both exciting opportunities and unique challenges.

In this article, we will explore the impact of longevity on retirement planning and strategies tailored to individuals very close to retirement.

Longevity and Retirement Planning: Preparing for an Extended Retirement

Longevity, or the extended average lifespan, has transformed the landscape of retirement planning. Here's what you need to consider:

1. A Longer Retirement Horizon

You may have initially planned for a retirement lasting 15-20 years. However, many retirees are now enjoying 30 years or more in retirement.

As you are very close to retirement, it's crucial to ensure your financial resources can sustain you over an extended period.

2. Increased Financial Needs

With a longer retirement comes higher financial needs.

Inflation, the rising cost of healthcare, housing, and other essentials mean that your savings must stretch further to maintain your desired lifestyle.

3. Managing Risks

The longer your retirement, the more you are exposed to risks.

There's more time for economic downturns, recessions, or market volatility to impact your investments.

There's more time for inflation to eat away at your purchasing power over time.

There's more time for unexpected healthcare costs to derail an otherwise sound plan.

It's essential to manage these risks carefully.

Strategies for Pre-Retirees to Address Longevity in Retirement Planning

Here are strategies tailored for individuals very close to retirement:

1. Optimize Your Investment Plan for Retirement

Before retirement, ensure that your investment portfolio is organized in a way that will protect against risks you'll face over the course of an extended retirement including stock market fluctuations, inflation risk, liquidity risk and longevity risk.

Consult with a retirement planning specialist to craft a balanced investment plan that's built to last for a potentially very long retirement.

2. Develop a Sustainable Retirement Income Plan

When paychecks stop, you'll need a plan for how to use a combination of income sources such as social security benefits, pensions, and investments to fund your expenses.

The retirement income plan needs to be structured so your money lasts for life.

Here's an article that discusses a framework to keep your retirement income plan on track for the long-term: Building a Retirement Cash Flow Statement

3. Make the Most of Social Security Benefits

Social security benefits provide a significant source of retirement income.

Deciding when to start your benefit is a decision that will have long lasting implications throughout your retirement.

Here's an article with more discussion about deciding when to start collecting benefits: Social Security Benefits Article

5. Healthcare Planning

Given the potential for increased healthcare expenses as you age, it's crucial to include provisions for rising medical costs in your retirement plan.

Once you obtain age 65 and are eligible for Medicare, here's an article comparing Medicare Supplement vs. Medicare Advantage plans: Medicare Options

For those retiring before age 65, here's an article about health insurance options to bridge the gap to Medicare eligibility: Health Insurance When Retiring Before Age 65

6. Review and Adjust Regularly

Retirement planning is an ongoing process.

As you approach retirement, consistently review your financial goals and make adjustments to ensure they align with your evolving needs and circumstances.

The article also linked above about building a retirement cash flow statement provides a practical and effective framework for monitoring and keeping your plan on track over time.

7. Seek Professional Guidance

A Certified Financial Planner who specializes in retirement planning can provide invaluable guidance.

They can help you create a customized plan that addresses your specific situation and prepares you for the financial aspects of a longer retirement.

Embracing a Longer Retirement

While the prospect of longevity brings financial considerations, it also offers the opportunity to enjoy a more extended and fulfilling retirement.

By proactively addressing these considerations and adopting strategies tailored to your proximity to retirement, you can embrace a longer retirement with confidence.

In conclusion, longevity is reshaping retirement planning for those very close to retirement.

With the right strategies and a careful approach, you can navigate the challenges and seize the opportunities that come with an extended and vibrant retirement.

Start planning today, so you can enjoy a secure and fulfilling retirement, no matter how many years it lasts.

Want To Discuss This Individually?

1 - For clients: Call or email me any time as always.

2 - For non-clients: Complete the form on the website to request a retirement planning consultation:

This is article is for informational purposes only and should not be considered as tax or legal advice. Advice is only provided after entering into an Advisory Agreement with the Advisor. See other disclosure here: Disclosures

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Article Disclosures


Informational Purposes

The information provided is for educational and informational purposes only and does not constitute investment advice and it should not be relied on as such. It should not be considered a solicitation to buy or an offer to sell a security. It does not take into account any investor's particular investment objectives, strategies, tax status or investment horizon. You should consult your attorney or tax advisor.


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Illustrative Purposes​

The information contained is for illustrative purposes only.

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