5 Ways to Handle Longevity Risk in Retirement

As you think about your retirement, you may be naturally concerned about outliving your savings, which we call longevity risk. We use five main strategies for ensuring that you don’t run out of retirement income, no matter how long you live:

Reduce Longevity Risk in Your Retirement Plan

We start with Guardrails on spending, which is a strategy to reevaluate your safe withdrawal rate each year as life changes or your investment balances go up or down unexpectedly.

retirement guardrails in monte carlo analysis


Next, we look at tax-efficient withdrawal strategies to minimize how much you pay in income taxes so that your money can go further in years. We can advise you to do Roth conversions, or withdraw from pre-tax retirement accounts in low income years.


Asset allocation between stocks and bonds is an important way to balance your need for regular income with the long-term performance of stocks, which we know beat inflation over long periods of time. Inflation over long periods contributes to longevity risk, so owning assets that counteract inflation is important.


Fourth, choosing when to claim your Social Security can be a great way to boost your income over the long haul. SS has a built-in benefit increase if you wait past your full retirement age to start. Since SS increases with inflation, it’s a good way to protect your income for your whole life.

social security comparison of start date

Finally, a low-cost, simple annuity can be a good strategy if you need more fixed income monthly. Annuities typically pay out for your whole life, regardless of how long you live.

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