Ep 18: Preparing for Longevity Risk

January 6, 2022

Today we’ll talk about longevity risk when it comes to retirement planning. Alan and Troy’s oldest client is about 96 with a fairly active lifestyle. Does your retirement plan account for the possibility of such a long lifespan?

To call it longevity “risk” is a strange concept since the idea of living a long and healthy life is the goal. So, what’s the risk? Most of us work until our mid-to-late 60s or early 70s and then live off of savings. The amount you need in savings changes if you live until almost 100, especially if you need to live off of your savings for almost 40 years. Financial advisors spend so much time talking about having a reliable and sustainable source of income in retirement because it’s so important.

Alan and Troy make sure all of their clients stress test their plan for a number of scenarios to ensure their portfolio will last until at least 95. If your plan is set up with a guaranteed income that will last as long as you do, your plan is more likely to succeed. A lot of their prospective clients come in fearing they will run out of money, but after building a solid income plan with Alan and Troy they can have the financial confidence they need in retirement. Do you have a plan that leaves you feeling confident against longevity risk?

Listen to the full episode or use the timestamps below to jump to a specific section.

0:55 – How old is their oldest client?

2:09 – How old is their oldest family member?

2:48 – Why is it considered longevity “risk”?

5:53 – How well do people plan for longevity?

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