Are You Financially Prepared to Live to 95?

Most people dream of a long and healthy life, but few stop to consider what it means financially if they live into their nineties. This is where longevity risk becomes important. Simply put, longevity risk is the possibility that you might outlive your savings. As life expectancy increases, more Americans are facing this very real concern.

According to the Social Security Administration, a man who turns 65 today has a 1 in 5 chance of living to age 90 and a 1 in 10 chance of reaching age 95. For women, the odds are even higher: 1 in 3 will live to 90, and nearly 1 in 5 will make it to 95.

The Cost of Living Longer

Living longer is certainly a gift, but it also means you may need to stretch your retirement savings for 30 years or more. That can create pressure on investment returns, increase the impact of inflation, and raise the risk of needing long-term care. Healthcare costs tend to rise with age, and essentials such as housing, food, and insurance don’t disappear after retirement.

For many people, Social Security will not be enough to cover all their needs. Without additional income from savings, investments, or a pension, retirees may find themselves in a financially vulnerable position in their later years.

How to Prepare for Longevity Risk

Planning for a long life means thinking beyond just your 60s and 70s. Consider these strategies to help protect your financial future:

• Start saving as early as possible and continue contributing to retirement accounts
• Review your retirement plan regularly to make sure your income projections match your life expectancy
• Consider delaying Social Security benefits to maximize monthly income
• Build a diversified investment portfolio to balance growth and protection
• Plan for healthcare and long-term care costs with appropriate insurance or savings
• Work with a financial advisor to create a plan that adapts to your changing needs

Living to 95 is becoming more common, and that means your financial plan needs to last longer too. Are you financially prepared for this possibility? If you’re having doubts, let’s schedule an appointment. Our team can help you build a strategy that supports your retirement needs no matter how long you live.