Longevity becomes retirement’s top risk
Longevity risk — the chance clients outlive their assets — is emerging as the leading retirement concern, with advisors urged to stress‑test plans into the mid‑90s rather than relying on standard life‑expectancy tables. (kiplinger.com)
The Actuaries Longevity Illustrator was redesigned and relaunched June 25, 2024 to let planners generate probability charts showing the chances a client will reach specific ages and to visualize planning horizons beyond average life‑expectancy figures. (lifehealth.com) A working paper from NBER (Hurwitz & Mitchell, WP 33872, May 23, 2025) found professional advisors change spending and investment recommendations when provided client‑specific health and longevity information, while amateur advisors react mainly to simple cues. (nber.org) HealthView Services’ May 14, 2024 white paper — built from roughly 266 million cases — reports 95% of Americans aged 60+ have at least one chronic condition and calculates a typical healthy 65‑year‑old man has about a 19.3% chance of reaching age 95, whereas 65‑plus people with diabetes have under a 1% chance. (prnewswire.com) Industry practice remains mixed: some advisers and software defaults still use age‑90 planning horizons, and Phil Parker has publicly recommended using age 90 as a conservative default for many clients. (planadviser.com) Research and market commentary point to annuities and longevity insurance as the principal institutional hedge against outliving assets, while analyses from CFA Institute and reporting from CNBC note those products provide guaranteed lifetime income but remain underused because of product complexity and behavioral barriers. (cfainstitute.org) Practice‑focused commentary from Kitces and others urges replacing single‑point life‑expectancy inputs with client‑specific, health‑adjusted projections and Monte Carlo or scenario stress tests that model outcomes into clients’ 90s and beyond to align savings and income strategies with probabilistic longevity outcomes. (kitces.com)
