What If I Outlive My Money? Risk Management for Retirement

You’ve worked hard, built a strong financial foundation, and are approaching retirement with $800K to $1M saved. But one fear lingers: What if you live longer than your money lasts? It’s one of the most common and justified concerns for today’s retirees.

What is Longevity Risk?

Longevity risk is the possibility that you live longer than expected and deplete your retirement savings. This risk is greater now than ever:

• Americans are living into their 90s
• Healthier lifestyles and medical advancements extend life
• Traditional pensions are rare

A 65-year-old couple has a 50% chance that one spouse will live to age 90. That means planning for a 30-year retirement isn’t conservative—it’s realistic.

How Longevity Risk Impacts Your Plan

• You may need more savings than you think
• Extended retirement means longer exposure to market volatility
• More years = more inflation, more healthcare needs, more unknowns

5 Ways to Manage Longevity Risk

1. Layered Income Strategy
   Divide your income sources into layers:

• Layer 1: Essentials covered by guaranteed sources (Social Security, pensions, annuities)
• Layer 2: Discretionary spending funded by portfolio withdrawals
• Layer 3: Long-term care, emergencies, and legacy goals

2. Consider Delaying Social Security
   Waiting until age 70 can increase your benefit by up to 32%, providing more guaranteed income for life.
3. Diversify Your Investments
   Asset allocation matters more in retirement. Combine growth investments with income-producing assets and a cash buffer.
4. Use a Dynamic Withdrawal Strategy
   Rather than a fixed 4%, adjust withdrawals based on:

• Market performance
• Inflation
• Life stage

This increases the likelihood that your money lasts longer.

5. Address Healthcare Early
   Plan for:

• Medicare premiums and out-of-pocket costs
• Supplemental insurance
• Long-term care (LTC) coverage or self-insurance

How Winthrop Helps You Navigate This

We don’t just build a plan based on your current balance—we craft one designed to evolve with you. Our approach:

• Tests multiple “what-if” scenarios
• Helps protect your lifestyle from economic shocks
• Ensures your plan adjusts for inflation, market shifts, and longer life spans

Don’t Let Fear Delay Your Planning

Avoiding the question of longevity risk only makes things worse. Proactive planning creates peace of mind and flexibility.

Conclusion

Outliving your money isn’t inevitable. With the right income strategy, healthcare planning, and dynamic withdrawal approach, you can thrive in retirement—no matter how long it lasts.

Let’s talk about securing your financial future for the long haul.