One of the most common—and rational—fears I hear from retirees is this:

“What if I live too long and run out of money?”

It’s a concern we call longevity risk, and it’s one of the most serious financial challenges facing today’s retirees. With people living longer than ever, retirement can easily last 25, 30, or even 40 years. That’s a long time to make your savings last—especially in a world of rising healthcare costs, market volatility, and inflation.

The good news? With the right strategies, you can build a retirement plan that’s designed not just to last, but to provide peace of mind, no matter how long you live.

Understanding Longevity Risk

It’s easy to underestimate how long retirement can last. The average life expectancy for a 65-year-old today is about 84 for men and 87 for women—but those are just averages. Many healthy retirees will live well into their 90s and beyond.

Living a long life is a blessing—but it also means:

• More years of living expenses
• More healthcare and long-term care costs
• More time exposed to inflation and market risks

In other words, longevity multiplies the impact of every other retirement risk. That’s why addressing it early—and proactively—is so important.

Top Strategies to Protect Against Outliving Your Money

1. Build a Solid Income Plan

The foundation of any retirement strategy is knowing where your income will come from. We help clients create income plans that mix guaranteed sources (like Social Security or pensions) with investment-based withdrawals.

A smart income plan will ensure your essential expenses are covered and your portfolio is built to last.

2. Delay Social Security (If You Can)

One of the most powerful tools to reduce longevity risk is delaying Social Security benefits. For every year you wait past full retirement age (up to age 70), your benefit increases by 8%.

If you expect to live into your late 80s or beyond, this higher monthly benefit can make a huge difference over time. It’s a guaranteed, inflation-adjusted income stream you can’t outlive—exactly the kind of tool you want in the fight against longevity risk.

3. Consider a Guaranteed Income Product

For some retirees, incorporating an annuity into their plan makes sense. Specifically, products like Single Premium Immediate Annuities (SPIAs) or Deferred Income Annuities can provide a guaranteed paycheck for life—no matter how long that is.

Annuities aren’t for everyone, and the right type must be chosen carefully, but in the right situation, they can serve as a kind of “personal pension,” helping reduce the pressure on your investment portfolio.

4. Use a Bucket Strategy

We often recommend the bucket strategy for retirement income planning. Here’s how it works:

• Bucket 1 (Years 1–3): Cash and very short-term investments for immediate needs
• Bucket 2 (Years 4–10): More conservative investments like bonds to provide medium-term income
• Bucket 3 (Years 10+): Long-term growth investments (stocks) to outpace inflation

This approach helps retirees avoid selling long-term investments in a downturn, while keeping money growing for the years ahead.

5. Be Strategic About Spending

One of the easiest ways to stretch your retirement savings is to spend more intentionally. That doesn’t mean you can’t enjoy life—but it does mean being realistic about how much you can safely withdraw each year.

The old “4% rule” (withdrawing 4% of your portfolio annually) is a decent starting point, but it may need adjusting based on your portfolio, spending needs, and market conditions.

Working with a financial planner to run stress-tested scenarios can help you find a sustainable withdrawal rate that gives you peace of mind.

6. Plan for Healthcare and Long-Term Care Costs

One of the biggest threats to your retirement savings—especially if you live a long life—is rising healthcare and long-term care expenses.

We help clients:

• Build healthcare costs into their retirement budgets
• Consider long-term care insurance or hybrid policies
• Explore Medicaid planning or the NJ Long-Term Care Partnership Program when appropriate

The earlier you address this piece of the puzzle, the more flexibility you’ll have later.

7. Keep Inflation in Check

Over a 30-year retirement, inflation can silently erode your purchasing power. That’s why it’s important to keep part of your portfolio invested for long-term growth, even in retirement.

A portion of your assets in stocks or stock-based funds can help your savings grow over time—and make sure your dollars go just as far in your 90s as they did in your 60s.

Final Thoughts

Longevity should be something we celebrate—not fear. But to enjoy a long retirement, you need a plan that’s built to last. The earlier you start preparing, the better positioned you’ll be to enjoy financial independence for as long as you live.

The key isn’t just having a large nest egg—it’s having a smart strategy to turn that nest egg into reliable income, to weather market downturns, to plan for healthcare, and to stay flexible as your needs evolve.

If you’re concerned about outliving your money, you’re not alone—and you’re not without options. We help clients every day build retirement plans that can stand the test of time. Let’s talk and make sure you’re on track to enjoy every year of retirement—without running out of money.