Most retirees don’t fear market crashes or inflation nearly as much as they fear one very real possibility: running out of money. And yet, many financial plans focus on growing your nest egg, not preserving and distributing it over a retirement that could span decades.

The Longevity Problem

This is the core of longevity risk—the risk of outliving your assets. Thanks to advances in medicine and healthier lifestyles, it’s now common for people to spend 25 to 30 years or more in retirement. While that’s great news from a life expectancy standpoint, it may create a challenge for your finances. The longer you live, the more income you may need—not just to get by, but to maintain your lifestyle, keep up with inflation, and handle unexpected costs like healthcare or long-term care.

What makes longevity risk especially dangerous is that it often creeps in gradually. You may feel financially secure when you retire, but if you’re withdrawing too much from your savings too soon—or the market takes a hit early in your retirement—it can set off a chain reaction that may erode your financial stability. Inflation quietly raises your cost of living year after year. Medical expenses become more frequent. If your income sources aren’t designed to keep up, your savings can start to drain faster than you realize.

General Rules May Not Cut It

Many retirees rely on rules of thumb like the 4% withdrawal rule, but retirement rarely follows a predictable formula. Life changes. Markets shift. You may end up living longer than you expected—or needing to financially support a spouse, child, or grandchild. Without a flexible, income-focused strategy, it becomes much harder to adapt to those changes without sacrificing your financial security.

That’s why today’s retirement planning needs to go beyond growth—it needs to focus on income that lasts. Fortunately, there are tools designed to address this. Annuities with lifetime income specifications are built specifically to provide income you can’t outlive, no matter how long you live or how the market performs. Some are fixed, offering predictable income; others are tied to market performance with caps or participation rates to allow for growth potential with downside protection.

In addition to insurance-based solutions, there are also investment strategies that can support income longevity. Dividend-paying stocks, bond ladders, and buffer ETFs can help generate income while managing risk. Buffer strategies in particular are gaining attention, as they can offer partial market exposure with built-in limits on losses—may be ideal for retirees who want growth without the full risk of volatility.

The key is knowing which tools make the most sense for your situation. There’s no one-size-fits-all answer, which is why working with a financial advisor who understands longevity risk can help make all the difference. An advisor can help you build a customized income strategy—one that can help grow your savings but helps you turn them into a reliable paycheck that lasts.

Reach out to us to get started on a strategy that’s designed to address this risk in a way that makes sense with your specific life and financial situation.