Longevity Risk: Build a Retirement Plan That Lasts to 92 and Beyond

Most people spend more time planning a two-week vacation than they spend planning for a retirement that could last three decades. That's not a criticism — it's a reflection of how hard it is to truly grasp what longevity means in financial terms. Living longer is a gift. But without the right plan, it can quietly become the biggest financial threat you never saw coming.

If you're between 50 and 70, this article is for you. We're going to talk honestly about the #1 retirement risk most Americans overlook — running out of money simply because they lived too long — and exactly what you can do to build a plan that goes the distance.

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The Longevity Numbers Most People Don't Know

Here's a statistic that stops people cold: a healthy 65-year-old couple today has roughly a 50% chance that at least one spouse will live to age 92. One in four will make it to 97.

Let that sink in for a moment.

If you retire at 65 and live to 92, that's a 27-year retirement. If you live to 97, that's 32 years. Most financial plans — and most retirees — are built around a 15 to 20-year time horizon. That gap between expectation and reality is where financial security quietly unravels.

According to actuarial data used by financial planners, the average 65-year-old man today can expect to live to about 84, and the average 65-year-old woman to nearly 87. But averages are deceiving. Half the population lives longer than the average — and if you're in good health, a non-smoker, and have access to quality healthcare, your personal odds shift even further toward a long life.

Planning to the average means planning to fail for half the population. The smarter move is to plan for the possibility — not the certainty, but the very real possibility — that you'll need your money to last well into your 90s.

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Why a Long Life Can Break an Underprepared Portfolio

Longevity risk doesn't work alone. It teams up with two other forces that can devastate a retirement portfolio: inflation and sequence-of-returns risk.

The Inflation Trap

At a modest 3% annual inflation rate, your purchasing power is cut nearly in half over 24 years. That means the $5,000 a month that feels comfortable at 65 will feel more like $2,700 in real terms by the time you're 89. Groceries, utilities, healthcare costs, and housing don't freeze in place just because you've retired.

The Sequence-of-Returns Danger

This one is less well known but equally dangerous. If the market drops significantly in the first few years of your retirement — while you're still withdrawing money — the damage can be permanent. A portfolio down 30% that is simultaneously being drawn down by withdrawals loses its ability to recover the way a younger accumulation portfolio can. This is sequence-of-returns risk, and it's why a strong bull market in your 70s can't necessarily undo a brutal bear market in your late 60s.

Longevity amplifies both of these threats. More years in retirement means more years of inflation eroding your spending power, and more years of exposure to potential market downturns.

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The Foundation of a Lasting Plan: Building a Guaranteed Income Floor

The most effective retirement income strategies share one foundational principle: you don't leave essential expenses to chance.

A guaranteed income floor is exactly what it sounds like — a reliable, predictable stream of income that covers your non-negotiable monthly expenses regardless of what the market does. Think of it as the financial equivalent of a foundation. Everything built on top of it can be more flexible because the essentials are already secured.

Your guaranteed income floor is typically built from two sources:

• •Social Security benefits — More on this in a moment, but when you claim and how you claim matters enormously over a 25–30 year retirement.
• •Guaranteed income products — Certain financial vehicles are specifically designed to provide income you cannot outlive, no matter how long you live. When structured properly, these can fill the gap between Social Security and your actual monthly expenses.

Once your floor is set, the rest of your portfolio — investments in stocks, bonds, and other assets — can be positioned for growth without the emotional pressure of having to also be your lifeline. This separation of purpose is one of the most powerful concepts in modern retirement income planning.

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Social Security: Your Most Overlooked Longevity Tool

Here's a surprising fact: over 40% of Americans claim Social Security at age 62, the earliest possible age — and the lowest possible benefit. Only about 4% delay to age 70, when benefits are at their maximum.

For many retirees, this is one of the most expensive decisions they'll ever make.

Every year you delay claiming Social Security beyond your full retirement age (currently 66–67 for most people), your benefit increases by approximately 8% per year — guaranteed. By waiting from 62 to 70, you can increase your monthly benefit by as much as 76%.

For a couple where one spouse had a high earning history, a coordinated claiming strategy — where one spouse claims early and the other delays to 70 — can mean tens of thousands, sometimes hundreds of thousands, of additional lifetime income over a long retirement.

Given that Social Security is inflation-adjusted and guaranteed for life, it is — for most people — the single most valuable longevity hedge in their financial arsenal. Getting this decision right isn't just about the monthly check. It's about building the strongest possible guaranteed income floor for decades to come.

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Tax Diversification: The Silent Retirement Multiplier

Most Americans approaching retirement have the majority of their savings in tax-deferred accounts — traditional IRAs, 401(k)s, and similar vehicles. That money has never been taxed. And at some point, the IRS will want its share.

Starting at age 73, the government requires you to take Required Minimum Distributions (RMDs) from those accounts — whether you need the money or not. Those distributions are taxed as ordinary income, and depending on the size of your portfolio, they can push you into higher tax brackets, trigger surcharges on Medicare premiums, and cause more of your Social Security benefits to become taxable.

A well-constructed retirement plan doesn't just maximize income — it manages the tax character of that income.

The strategy is called tax diversification: holding assets in three buckets:

• •Taxable accounts (brokerage accounts) — flexible, capital gains tax rates
• •Tax-deferred accounts (traditional IRAs, 401(k)s) — taxed upon withdrawal
• •Tax-free accounts (Roth IRAs, certain life insurance structures) — tax-free in retirement

Having the ability to pull from different buckets in different tax years — based on your income needs and bracket situation — gives you remarkable control over your lifetime tax bill. For a couple in retirement over 25–30 years, smart tax bucket management can save hundreds of thousands of dollars.

This is why proactive Roth conversion strategies — moving money from tax-deferred to tax-free accounts during lower-income years before RMDs kick in — have become a cornerstone of sophisticated retirement income planning.

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Protected Growth: Staying In the Game Without Getting Knocked Out

A retirement that lasts 30 years still needs growth. You cannot simply move everything to cash or bonds and expect to stay ahead of inflation for three decades. But you also cannot afford to lose a significant portion of your portfolio right when you need it most.

This is where protected growth strategies come in — financial structures that allow your money to participate in market upside while providing a defined level of downside protection. The goal is not to eliminate all risk (that would also eliminate all growth), but to manage risk in a way that is appropriate for someone who is spending down assets rather than accumulating them.

The specific vehicles and structures available to accomplish this have evolved significantly over the past decade. When layered thoughtfully into a comprehensive retirement income plan — alongside a guaranteed income floor, a smart Social Security strategy, and tax diversification — they help ensure that a bad year in the market doesn't become a permanent setback in your retirement.

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Key Takeaways

• •Longevity is the #1 retirement risk most Americans underestimate. A healthy 65-year-old couple has a 50% chance one spouse lives to 92 — plan accordingly.
• •The average isn't safe enough. Plan for a 25–30 year retirement, not 15–20.
• •Sequence-of-returns risk is most dangerous early in retirement. A major market loss while withdrawing can permanently damage your portfolio's recovery potential.
• •Build a guaranteed income floor first. Cover essential expenses with income that cannot be outlived, regardless of market conditions.
• •Social Security claiming strategy matters enormously. Delaying to 70 can increase benefits by up to 76% — and that income is inflation-adjusted and guaranteed for life.
• •Tax diversification is not optional. Mixing taxable, tax-deferred, and tax-free assets gives you control over your lifetime tax burden.
• •Growth still matters in retirement. Protected growth strategies allow your money to grow without the full exposure to devastating downside risk.
• •The right time to build your plan is before you need it. Every year you wait is a year of compounding opportunity you cannot get back.

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Your Retirement Could Last 30 Years. Is Your Plan Ready?

Longevity is a blessing — but only if your financial plan is built to honor it. The strategies outlined in this article aren't theoretical. They are the building blocks of retirement income plans that have helped real families sleep soundly at night, regardless of what the market is doing.

But every situation is different. Your Social Security picture, your tax exposure, your investment mix, your income needs — all of it is unique to you. A generic plan built around someone else's assumptions isn't a plan. It's a gamble.

Mahinder Tolani at Legacy Income Advisory specializes in helping Americans aged 50–70 build personalized, comprehensive retirement income strategies — ones designed to last as long as you do.

If you're within 10 years of retirement — or already there — now is exactly the right time to pressure-test your plan against the realities of longevity, inflation, taxes, and market risk.

📞 Call directly: (404) 697-6066 ✉️ Email: mtolani@shivohfinance.com

👉 Book Your Free Strategy Session — a no-obligation, no-pressure conversation about where you stand and what your retirement could look like with the right income plan in place.

Your future self — the one living well at 87, 92, or beyond — is counting on the decisions you make today.