Forever Young: Longevity Prompts Fears of Running out of Money

The golden years are getting longer. 

Life expectancy in the US hit a record high of 79 years in 2024, ticking up 0.6 years from 78.4 years in 2023 as mortality rates lowered for unintentional injuries, COVID-19 and many chronic diseases, according to the Centers for Disease Control and Prevention. Healthcare companies are making breakthroughs for pancreatic cancer, weight loss, lung disease and more. Scientists are even investigating whether medicine could be used to address aging itself. 

But many people are worried about affording those extra years. Roughly four in 10 Americans aren’t confident today’s retirement planning methods adequately account for longer lifespans, according to a recent report from TIAA. When asked about the financial challenges of living longer, people’s top concerns were affording day-to-day living expenses, enjoyment in those bonus years and long-term medical care. 

“Longevity risk planning has always been a key part of a good retirement plan,” said John Bell of Free State Financial Planning. “Medical advances like GLP-1s seem like one more reason to plan for a long life rather than banking on not outliving your money.” 

Shelf Life Extended

When it comes to planning for longer lives, reshuffling investments often isn’t the answer:

• Having clients decide what the money is for — where they’ll live, what their expenses look like, what their goals are and what, if anything, they want to leave behind is the starting point, Bell said. Then, he “stress-tests” whether the current plan would work if someone lives longer, like to 100 instead of 90. “The levers that move the needle are things like spending flexibility, when to claim Social Security, Roth conversions in the low-income years and whether a vacation house, moving or downsizing still fits the plan,” he said. 
• Clients also need to be convinced to save for a potentially longer life. Many are resistant to that, as they don’t understand that they’re not “average,” Silverling Financial owner Michael McMeans said. Simple things like good dental hygiene, walking regularly and strong healthcare can put your life expectancy well above average, he noted. 

Debunked. Another misconception clients have about longevity is that they’ll save up, then spend down, McMeans said. But usually, they save up, live off the top, allow the base nest egg to grow and help their income stream keep pace with inflation, he said. “As a result, whether they live a long time or not, there will be assets at their deaths, and probably a good deal amount more than they expect.”