Will Your Money Last as Long as You Do? How to Manage Longevity Risk
June 26th, 2025 | 4 min. read
Living a long life should be something to celebrate, not fear.
But for many people nearing retirement, the idea of living to 90 or even 100 sparks anxiety. Not about health, but about money. Will your savings go the distance?
This is what financial professionals call longevity risk: the risk of outliving your money. At Advance Capital Management, we help people plan not just for retirement, but for long, meaningful lives.
Here's what you need to know, and what you can do now to prepare for the possibility of living a lot longer than you think!
What is longevity risk?
Longevity risk is the uncertainty of how long you’ll live and the financial consequences of living longer than expected.
The concern is real. According to research from the Nationwide Retirement Institute and the American College of Financial Services, extending your retirement from 30 to 35 years increases your chances of running out of money by 41%, based on historical market returns.
Add in the potential for lower projected returns, higher inflation and rising health care costs, the risk climbs even higher.
How likely is it that I’ll live past 90?
Longer lifespans are becoming more common. A couple who both reach age 65 has a 50% chance that one spouse will live to age 93, according to the Society of Actuaries.
And while only 29% of Americans say they want to live to 100, projections show that the number of centenarians is expected to quadruple over the next 30 years.
The question isn’t just how long will you live? but will your money be there with you?
How do I estimate my own longevity?
You can’t know for sure, but there are tools to help. Your personal life expectancy depends on your current health, family history, lifestyle and, well, luck.
To get an estimate, you can try the Social Security Life Expectancy Calculator. Or take a deeper dive with the Blue Zones True Vitality Test.
However, the point isn’t to guess the exact number. It’s to plan for the possibility of a longer life than you expect.
What steps can I take now to protect against longevity risk?
The right steps for managing longevity risk will depend on your personal situation, including your health, your retirement goals and the sources of income available to you. There’s no single approach that works for everyone, but the key is having a plan that can adapt to a longer life.
Here are some potential ways to help your money go the distance:
- Consider maximizing guaranteed income sources like Social Security.
If you’re healthy and expect to live a long life, you might be able to afford to wait. Delaying Social Security from age 62 to 70 can increase your benefit by up to 76%. For married couples, a coordinated strategy, such as one spouse claiming early while the other delays, can enhance household income and survivor benefits. For more, download our financial guide on Social Security.
- Use a “bucket” strategy for your investments.
Depending on your assets, the bucket strategy may be a sensible approach to having funds readily available for expenses while allowing the rest to grow. Basically, you divide your retirement savings into time-based buckets:
- Short-term (cash): To cover immediate expenses
- Medium-term (bonds): For the next 5–10 years of income needs
- Long-term (stocks): To support growth and keep pace with inflation
- Set a flexible withdrawal strategy.
Rather than sticking to a fixed rule like the 4% guideline, consider adjusting your withdrawals based on market conditions. Pulling back in down years and taking more when markets are strong could help extend the life of your portfolio while allowing you to still live out your retirement goals.
- Make informed decisions about your pension.
If you’re eligible for a pension through your employer, your expected longevity may play a big role in whether you choose a lump sum or a monthly annuity. A longer retirement may favor the guaranteed stream of income, while a lump sum offers flexibility and the potential for growth. An adviser can help you weigh the trade-offs based on your full financial picture.
What about long-term care and rising medical costs?
This is one of the biggest threats to your retirement. After age 65, you have a 70% chance of needing long-term care.
Medicare generally won’t cover it. And with nursing home costs averaging over $8,000/month, it can quickly eat into your nest egg.
Some ways you can plan ahead:
- Exploring long-term care insurance or hybrid life insurance policies
- Using an HSA (Health Savings Account), which offers tax-free growth and withdrawals for medical expenses
- Building a dedicated health care fund into your retirement plan
Can working longer help?
Absolutely. Even part-time work can provide extra income, delay portfolio withdrawals, and perhaps most importantly, keep you socially and mentally engaged.
About 1 in 5 retirees still work part-time or full-time, and many do it by choice, not necessity. If you enjoy your work or want a phased transition into retirement, this can be a powerful longevity strategy.
How does mindset impact longevity planning?
Interestingly, your attitude plays a big role. The Nationwide study also found that optimists are 75% more likely to save at least 10% of their income. People who feel confident in their financial knowledge tend to make better long-term decisions.
So while it helps to plan for a long life, it also helps to believe it’s possible and prepare accordingly.
What else should I do to be ready?
Get real about your expenses.
Track your spending now so you know what retirement will actually cost. That includes essentials, fun money and unexpected bills.
Keep taxes in mind.
Roth conversions, asset location strategies and managing RMDs can help you minimize taxes and stretch your savings further.
Talk to a financial adviser.
A comprehensive retirement plan includes income projections, investment strategy, tax planning and more. Working with an adviser can help you tailor a plan that prepares you for the possibility of a long and fulfilling retirement.
Bottom line
You don’t need to fear a long life. You just need to plan for it.
At Advance Capital Management, we help people create retirement strategies with the goal of helping you live the life you want, no matter what the future brings.
If you’re ready to start planning for the years ahead, let’s talk.
Advance Capital Management is a fee-only RIA serving clients across the country. The Advance Capital Team includes financial advisers, investment managers, client service professionals and more -- all dedicated to helping people pursue their financial goals.
