Longevity: Don’t plan for an average retirement

Longevity risk is becoming a central retirement planning issue as many Americans may spend more years in retirement than they expect.

The key challenge is that average life expectancy can be misleading, especially when health, smoking status, and family circumstances can materially change the planning horizon. For advisors, this creates an opportunity to move conversations beyond simple averages and toward more personalized income strategies that better match real-life probabilities.

The main risk is underestimating how long assets need to last, which can leave retirees exposed to shortfalls later in life. A more tailored approach to longevity can improve confidence in retirement spending decisions and help protect against outliving savings.