One of the greatest unknowns in retirement planning is how long your savings need to last. With advances in healthcare and healthier lifestyles, retirees today are living longer than ever. While this is something to celebrate, it also presents a unique financial challenge—ensuring that your money can support a longer life. Planning for longevity in retirement is essential to help reduce the risk of outliving your resources. 

Longevity risk refers to the possibility of living longer than your financial plan anticipates. Without a strategy in place, even well-funded retirement accounts can be strained by decades of withdrawals, rising costs, and unexpected expenses. The good news? With thoughtful planning, this risk can be addressed head-on. 

How Longevity Affects Retirement Planning 

A longer retirement means a greater need for: 

• Sustainable income sources 

• Continued investment growth 

• Flexibility to adapt to changing needs 

For example, someone retiring at age 65 may need their savings to last 25 to 30 years—or even longer. That’s a significant span of time to cover healthcare, housing, travel, and daily living expenses. Failing to account for longevity can lead to overly aggressive withdrawals early in retirement, which may deplete savings too soon. 

Planning for longevity in retirement involves anticipating how your needs might change and building in safeguards to support those changes over time. 

Creating Lifetime Income Streams 

One of the most effective ways to manage longevity risk is to build a foundation of income that lasts as long as you do. This often involves combining: 

• Social Security benefits 

• Pension income (if available) 

• Annuities with lifetime income features 

Lifetime income tools, such as fixed index annuities with income riders, can provide consistent payments that continue for life. This helps reduce the reliance on investment withdrawals and provides a measure of confidence, even in uncertain markets. 

At Fredericks Wealth Management, we help clients evaluate whether income annuities make sense as part of their overall retirement income strategy. 

Managing Withdrawal Rates 

The rate at which you withdraw from your retirement accounts can have a major impact on whether your savings will last. A common approach is the 4% rule—where you withdraw 4% of your portfolio in the first year of retirement and adjust for inflation thereafter. However, this rule may not apply to every situation, and it’s important to personalize your withdrawal plan.

Factors like market performance, inflation, and your personal lifestyle will influence what withdrawal rate is appropriate. Regularly reviewing your plan and adjusting as needed is a key part of planning for longevity in retirement. 

Investing for Growth and Preservation 

Even in retirement, maintaining a portion of your portfolio in growth-oriented investments is important. While some risk reduction is appropriate as you transition into retirement, overly conservative allocations can lead to shortfalls over the long term. 

A balanced portfolio that includes income-producing assets, equities, and fixed income can help support both stability and growth. This balance allows you to draw income from more stable sources while giving your remaining assets the opportunity to continue growing. 

Planning for Healthcare and Long-Term Care 

Longer lives often mean more healthcare needs. As you plan for the future, it’s important to account for rising medical expenses and the possibility of long-term care. This may include: 

• Medicare premiums and out-of-pocket costs 

• Long-term care insurance or hybrid life insurance solutions 

• Dedicated savings or investment accounts for healthcare needs 

These costs can be significant, and preparing for them now is an important step in planning for longevity in retirement. 

Reviewing and Adjusting Your Plan 

Longevity planning isn’t a one-time task. Your financial situation, health, goals, and the economic environment can all change. That’s why regular reviews of your retirement plan are so important. Adjusting spending, rebalancing investments, and revisiting income strategies can help ensure that your plan stays aligned with your extended timeline. 

At Fredericks Wealth Management, we encourage ongoing conversations with clients so that plans evolve as life does. 

Planning for Longevity in Retirement with Confidence 

Living longer is a gift—but it also requires a strategy. By planning for longevity in retirement, you can help create a sustainable future for yourself and those you care about. Whether you’re approaching retirement or already living it, Fredericks Wealth Management can help you evaluate your current plan and explore ways to make your income last. Let’s build a strategy that supports the years ahead—however many there may be. Reach out today to schedule a conversation with our experienced team.