The longevity mistake: why you plan to the wrong age
Most retirement plans end at 85 — the average. But ‘average’ means half of people live longer, and for a 65-year-old couple there’s better than even odds at least one reaches 90, with a chance of 95-plus. Plan to the average and longevity risk gives you a 50% chance of outliving your money. The honest horizon isn’t 85; it’s 90–95.
1. The age your plan secretly assumes
Every retirement plan has a hidden assumption buried in it: the age you’ll die. Most plans quietly set it around 85, because that’s roughly “average” life expectancy — and that single number, more than almost any other, decides whether your money lasts. The problem is that planning to the average is one of the most common and dangerous errors in retirement, and it has a name: longevity risk, the risk of outliving your savings.
Here’s the trap. “Average” life expectancy is a median — by definition, about half of people live longer than it. So if you build a plan that runs out at the average, you’ve quietly accepted something like a 50% chance of outliving your money. That’s not a conservative plan; it’s a coin flip. And unlike a market crash, longevity risk doesn’t announce itself — it shows up as a slow arithmetic problem: five or ten extra years of expenses the portfolio was never built to cover.
This dispatch unpacks why the average is the wrong number, why couples face a longer horizon than either spouse alone, and how to plan to an age you’ll probably reach rather than one you’ll probably exceed — with the income that makes living long a blessing instead of a budget problem.
Part of the confusion comes from quoting the wrong number entirely. The life-expectancy figure most people have heard — around 79 in recent years — is life expectancy at birth, an average that includes everyone who died young. But if you’ve already reached 65, you’ve survived all those early risks, so your remaining life expectancy is meaningfully longer. Recent federal data put a 65-year-old’s remaining life expectancy at roughly 19 to 20 years — to about age 84 to 86 on average, well past the at-birth figure. Planning to 79 because that’s “life expectancy” when you’ve already made it to 65 would understate your horizon by the better part of a decade. The right input for retirement planning is always life expectancy at your attained age — and even that is just the midpoint, with a substantial chance of living years beyond it.
2. Why “average” is the wrong number
Three things make the average dangerously misleading as a planning horizon.
→ ~half of people live longer than it
→ planning to it ≈ a 50% chance of outliving the plan
Honest horizon = the upper tail: ~age 90–95+
It’s a midpoint, not a ceiling. Roughly half of 65-year-olds outlive their life expectancy — many by years. A 65-year-old man has about a 30% chance of reaching 90; a woman’s odds are around 40%, with a real chance of 95. The tail isn’t exotic; it’s where a large minority of people actually land.
It ignores improving longevity. The standard tables are “period” tables that freeze today’s mortality rates. Actual future longevity, accounting for ongoing medical and public-health gains, tends to run longer — so even the tail figures may understate.
It compounds with other risks. Living longer doesn’t just add years of spending — it gives inflation more time to erode your dollars and gives a bad sequence of early returns more time to do damage. A retiree who lives to 95 needs meaningfully more than one who lives to 85, often cited at around 50% more savings.
3. The couple problem
For married retirees, the right horizon is longer still — and most plans get this wrong too. The plan doesn’t need to last until your life expectancy; it needs to last until the second spouse dies.
Because two people each have their own chance of living long, the probability that at least one survives to an advanced age is much higher than for either alone. For a 65-year-old couple, there’s better than a 50% chance at least one spouse reaches 90, and roughly a one-in-five chance one reaches 95. The joint life expectancy of a 65-year-old couple lands close to age 90 — years beyond either individual’s number.
This is why married couples should plan to the longer of the two lifespans, not the average of them, and why the survivor’s years matter so much — they’re the years most likely to stretch furthest, often on a single income and a single tax return. (See the widow’s penalty for what those years cost.)
The average is a coin flip dressed up as a plan. For a couple, the money has to outlast whichever spouse lives longest — and there’s a better-than-even chance that’s well into the 90s.
4. See your real horizon — and fund it
The estimator shows your odds of reaching 85, 90, and 95 from your current age, and a conservative planning horizon to fund.
Longevity & Planning-Horizon Estimator
Estimates your probability of reaching key ages from your current age, using approximate SSA-style survival rates. For couples it assumes one male and one female and shows the “at least one survives” odds. Illustration only — your health and family history matter. Not advice.
Probabilities are approximate, based on period survival rates that tend to understate future longevity; couples assume independent male/female survival. Use as a prompt to plan to the upper tail, not as a precise forecast.
Once you plan to the right horizon, the question becomes how to fund a long life without hoarding for a short one. The answer is guaranteed lifetime income — and federal retirees start with a strong hand:
Lean on your COLA’d annuity. A FERS annuity with its cost-of-living adjustment, plus Social Security, are lifetime, inflation-protected income. They get more valuable the longer you live — the definition of longevity insurance. Covering essentials with this floor means a long life can’t bankrupt you.
Delay Social Security toward 70. Each year you wait permanently raises your inflation-adjusted benefit, and it pays for life — one of the cheapest, most powerful longevity hedges available, especially for the higher earner in a couple. (See why most claim too early.)
Consider annuitizing a slice. For the portfolio portion, an income or longevity annuity can convert savings into a lifetime stream, insuring the tail you can’t predict.
Stress-test past your plan age. Whatever horizon you set, check what happens if you live five years longer. If the plan breaks, it was never conservative.
It’s tempting to treat living a long time as purely good news — and it is, as a life outcome. But financially, longevity is the risk multiplier that amplifies every other retirement risk. The longer you live, the more years inflation has to halve your purchasing power; the more exposed you are to a bad sequence of returns early on; the more likely you are to face the expensive no-go years and a long-term-care event; and, for couples, the longer the surviving spouse spends navigating single-filer taxes and a reduced income. None of these are reasons to fear a long life — they’re reasons to build the plan around one. A plan engineered for age 95 with guaranteed lifetime income covering essentials handles a short life effortlessly (you simply leave more behind) but a plan built for 85 fails catastrophically if you reach 95. The asymmetry is the whole point: plan for the long life, because that’s the scenario where planning actually matters.
The survival probabilities here are approximate and based on period life-table patterns, which freeze current mortality and therefore tend to understate future longevity; cohort tables and annuity tables generally assume longer lives. Individual longevity depends heavily on health, lifestyle, and family history, which a population average can’t capture — a healthy non-smoker with long-lived parents should plan for a longer horizon than the averages suggest. The couple figures assume independent male/female survival and are illustrative. Use these as a reason to plan to the upper tail and to insure your essentials with lifetime income, and revisit your horizon at milestone birthdays.
Frequently asked questions
What age should I plan to live to in retirement?
Not the average — that’s the core mistake. Average life expectancy is a median: roughly half of people live longer than it, so building a plan that ends at the average bakes in about a 50% chance of outliving your money. For someone who has already reached 65 in reasonable health, planners generally recommend funding the plan to at least age 90 to 95, and longer for those in good health or with family histories of longevity. The reason is the tail: a 65-year-old man has roughly a 30% chance of reaching 90 and a meaningful chance of 95, and a 65-year-old woman’s odds are higher still. For a married couple the relevant number is even longer, because the plan has to last until the second spouse dies, not the first. A common, defensible rule of thumb is to plan a single person to age 90 to 95 and a couple to 95 or beyond, then stress-test the plan against living even longer. Planning to a horizon you’ll probably exceed is the cautious error; planning to one you’ll probably fall short of is the dangerous one.
Why is life expectancy at 65 higher than life expectancy at birth?
Because of survivorship. Life expectancy at birth — the number most often quoted, around 79 in recent years — is an average across everyone, including those who die young from accidents, illness, or other causes before reaching old age. Once you’ve actually reached 65, you’ve already survived all of those early risks, so your remaining life expectancy is longer than the at-birth figure would suggest. In recent federal data, a 65-year-old can expect roughly 19 to 20 more years of life on average — to around age 84 to 86 — well beyond the at-birth number. This is why using life expectancy at your attained age, not at birth, is essential for retirement planning: planning to the at-birth figure of 79 when you’ve already reached 65 would dramatically understate how long your money needs to last. And remember these are still averages — your attained-age life expectancy is the midpoint, with a substantial chance of living years beyond it.
How do I protect against living too long (longevity risk)?
The most effective protection against outliving your money is guaranteed lifetime income — money that keeps arriving no matter how long you live, ideally adjusted for inflation. Federal retirees are unusually well positioned here, because a FERS annuity with its cost-of-living adjustment and Social Security are both lifetime, inflation-protected income streams: the longer you live, the more valuable they become, which is exactly what longevity insurance should do. Two specific moves strengthen that floor. First, delaying Social Security toward age 70 permanently increases your inflation-adjusted benefit, and since it pays for life, it’s one of the cheapest and most powerful forms of longevity insurance available. Second, for those who want to insure a portion of a portfolio, an income annuity — including deferred or longevity annuities that begin paying at an advanced age — can convert savings into a lifetime stream. The general principle is to cover your essential spending with guaranteed lifetime income so that no matter how long you live, the core of your retirement is funded, and your portfolio is exposed only to the discretionary part.