Should Your Retirement Income Plan Account for a Longer Life?
Build Confidence for a Retirement That May Last Decades
A retirement income plan should do more than help you reach a certain age or savings goal. We believe it should help support the life you want, even if retirement lasts much longer than expected. A longer life can bring more time for family, hobbies, travel, and meaningful experiences, but it can also bring more market shifts, higher living costs, and changing health needs.
Average life expectancy is only a starting point. If you are healthy, have a family history of longevity, or are planning as a couple, it may make sense to prepare for a retirement that stretches across several decades. Late summer can be a helpful time for this review, before fall schedules, year-end tax planning, and benefit decisions begin to demand attention.
Rather than treating longevity as something to fear, we encourage you to see it as a planning variable. A flexible plan can provide a clearer framework for decisions while leaving room for life to change.
Estimate a Timeline Beyond Average Life Expectancy
When we build retirement income strategies with clients, we look beyond a single average age. Health history, current habits, access to care, and family circumstances can all affect how long your savings may need to last. For couples, the planning horizon often needs to account for the spouse who may live the longest.
The surviving spouse may face changes such as the loss of one Social Security benefit, different tax treatment, and expenses that do not fall as much as expected after a partner dies. Housing, insurance, utilities, and healthcare can still make up a large part of the budget.
A longer-term retirement plan may include:
Conservative assumptions about how long income may be needed
Flexible spending expectations instead of one rigid budget
More than one source of income
A plan for the surviving spouse’s needs
Periodic reviews as health, family, and financial circumstances change
We do not view a longer life as a reason to delay retirement dreams. Instead, it is a reason to make sure your income approach has enough flexibility to support those dreams over time.
Build Income Sources That Can Weather Market Changes
A durable plan usually coordinates dependable income with investments that still have room to grow. Inflation can slowly reduce buying power, so keeping every dollar in cash may create one concern while taking too much market risk can create another. Our role is to help you consider how each income source can work together based on your goals, risk comfort, and tax situation.
Income may come from several places, including:
Social Security benefits
Pension income, when available
Taxable investment accounts
Traditional and Roth retirement accounts
Annuities or income-producing investments when they fit the broader plan
Each source can serve a different purpose. Social Security may provide a dependable base, while investment accounts may help fund travel, home projects, gifts, or other changing goals. The right mix depends on the household, not on a one-size-fits-all rule.
We also discuss sequence-of-returns risk, which is the risk of taking withdrawals while the market is down. A market decline early in retirement can have a greater effect when you are selling investments to pay expenses at the same time. Those investments may have less opportunity to recover once the market improves.
Keeping a reserve for near-term spending can help reduce pressure to sell longer-term investments during a downturn. This approach can give growth-focused assets more time to recover and pursue future opportunity. The amount held in reserve, the investment mix, and the withdrawal plan should all be tailored to your circumstances.
Plan for Health Care, Long-Term Care, and Family Needs
Retirement expenses rarely stay the same from year to year. Some work-related costs may disappear, but healthcare, home changes, transportation, caregiving, and family support can become more meaningful over time. We encourage families to think through these possibilities before a need becomes urgent.
Healthcare planning should include more than Medicare premiums. You may also want to consider supplemental coverage, prescriptions, dental care, vision care, hearing needs, and other out-of-pocket expenses. These costs can be difficult to predict, but recognizing them in your retirement plan can create more realistic expectations.
Long-term care deserves its own conversation. Medicare does not generally pay for extended custodial care, such as ongoing help with daily activities. A plan may involve dedicated savings, insurance options, family discussions, or a combination of these approaches. We can help you evaluate how care needs could affect income, assets, and a spouse’s financial security.
Family priorities matter, too. You may hope to help an adult child through a difficult period, contribute to a grandchild’s education, give to charity, or leave assets to heirs. Those goals can be meaningful, but we believe they should be balanced with your own long-term income needs first.
Adjust Withdrawals as Life and Markets Change
Retirement planning is not a one-time event. Markets move, spending habits shift, tax rules change, and family circumstances can look very different over time. Retirement income strategies work best when they include regular check-ins and clear guardrails for adjustments.
One useful approach is separating expenses into two categories: needs and wants. Housing, food, insurance, and healthcare may be less flexible. Travel, large purchases, entertainment, and gifts may offer more room to adjust if markets are under pressure or an unexpected expense appears.
During annual or semiannual reviews, we often help clients revisit:
Income needs and portfolio withdrawals
Required minimum distributions
Social Security choices and benefit timing
Insurance coverage and care planning
Estate documents and beneficiary designations
Taxes should be part of those conversations as well. Withdrawals from taxable, tax-deferred, and tax-free accounts can affect taxable income in different ways. A thoughtful withdrawal order may help manage taxes over time, though tax decisions should always be reviewed with qualified tax professionals who understand your individual situation.
Protect Choice Throughout Retirement
Planning for a longer life is really about protecting your choices. It can help you remain independent, support the people and causes you care about, and make room for experiences that matter to you without losing sight of future needs.
A late-summer review can be a practical reminder to look at longevity, inflation, healthcare expenses, market volatility, and family goals together. When your plan is built to adjust, you can make decisions with more confidence through every stage of retirement.
Build Income That Supports Your Priorities
At Legacy Wealth Management, we help clients evaluate retirement income strategies that align with their financial priorities and evolving needs. Our approach considers how your investments, income sources, and long-term goals can work together. Contact us to start a conversation about the next steps for your plan.