Mitigating Longevity Risk
Will Your Money Last as Long as You Do?
One of the biggest questions in retirement planning isn’t how to spend your time… it’s how long that time will last.
We’re talking about longevity risk—the risk of living longer than expected and running out of money before you run out of life. And for many retirees, this fear is very real. In fact, surveys have shown that the idea of running out of money in retirement is scarier than death itself.
Why? Because retirement isn’t a finish line—it’s an open road. And thanks to modern medicine and healthier lifestyles, that road is getting longer. Back in 1950, the average life expectancy in the U.S. was just 68 years. Today, it’s around 79.5 years overall, and nearly 82 for women. If both you and your spouse make it to age 65, there’s a 50% chance one of you will live to see 93.
So, here’s the real question: Is your retirement strategy built to go the distance?
Longevity Risk Isn’t About Fear—It’s About Planning
None of us know exactly how long we’ll live. But the more information you have, the better you can prepare. It starts with a realistic look at your own health, your family history, and your lifestyle.
For a quick estimate, the Social Security Life Expectancy Calculator can give you a ballpark number. For something more personalized, try the Blue Zones True Vitality Test. This tool factors in how you live, not just your birth year.
These tools aren’t about predicting the future. They’re about giving you the power to make your plan sustainable—so your income keeps up with your life.
How Much Will You Need?
Once you have a sense of your timeline, it’s time to talk numbers. According to Northwestern Mutual’s 2024 Planning & Progress Study, today’s retirees believe they’ll need nearly $1.5 million to retire comfortably. That’s a 15% jump in just one year—far faster than inflation.
The old rule of thumb suggests replacing about 80% of your pre-retirement income, but that’s just a starting point. Depending on your health, retirement goals, and lifestyle, your number may vary. If longevity runs in your family—or you’re planning to retire early—you’ll need even more runway.
Maximize Your Social Security Strategy
Social Security still plays a foundational role in most retirement income plans. According to the Social Security Administration, half of all married couples and over 70% of single retirees rely on Social Security for at least half of their income.
So it’s critical to get the most out of it.
The most powerful move you can make? Wait. If you delay claiming Social Security from age 62 to 70, your monthly benefit increases by about 8% per year. That adds up to a payout that’s roughly 76% higher at age 70 than if you’d filed early.
And if you’re married, consider the 62/70 split strategy. Here’s how it works: the lower-earning spouse claims at 62, while the higher earner delays until 70. This provides immediate income from one spouse and boosts survivor benefits down the line.
These strategies aren’t just about maximizing monthly checks—they’re about creating a more durable income plan that reduces the risk of outliving your money.
Build a Strategy That Goes the Distance
You can’t control how long you’ll live. But with smart planning, you can control how long your money will last.
If you’re concerned about longevity risk, Social Security timing, or just want to review your overall retirement strategy, let’s talk. Visit www.OBWMLLC.com or call my office at (405) 993-6296 to schedule a time to chat. We're here to help you prepare for the retirement you’ve worked so hard for.
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Disclosure:
All content discussed in this article is for informational and educational purposes only and does not constitute financial, legal, tax, or investment advice. Opinions expressed are solely those of Olive Branch Wealth Management, LLC and its staff. The information presented is believed to be from reliable sources; however, Olive Branch Wealth Management, LLC makes no representations as to its accuracy or completeness. This article shall not be construed as an offer to sell or a solicitation to purchase any insurance product in any jurisdiction in which the agent is not licensed. Topics should be discussed with a licensed insurance agent, tax professional, or financial adviser before implementation. Olive Branch Wealth Management, LLC is not affiliated with or endorsed by the Social Security Administration or any government agency.
Source:
How to Manage Longevity Risk in Retirement – Kiplinger
