The structures that governed the old rules of retirement, and the security that they brought retirees, are being shattered. The culprits: a combination of increased life expectancy and a demographic bulge advancing toward age 65, along with dramatic changes in the role of employers in providing retiree benefits.

The facts: A person reaching 65 has an average life expectancy of 85. There is a 25 percent chance that one or both members of a 65-year-old couple will reach age 97. In coming years, the fastest-growing age segment will be people age 85 and older.

Employer-paid defined benefit pensions are disappearing rapidly. Federal programs have responded to the strain by raising the traditional Social Security retirement age, and more changes may come. Employers are reducing, or eliminating, retiree health care benefits. The Medicare program is under pressure; to date it has added private-sector choices including Medicare Advantage and Medicare Part D prescription drug benefits.

The good news: You’ll probably live longer. The bad news: You may be under stress to make your money last for a longer lifetime. It is called longevity risk. And it is a very real financial situation faced by people in retirement and those planning for retirement.

We built Longevity Alliance to help people navigate these changes. After spending so much of life focusing on how to accumulate enough to retire, many of us are just beginning to realize the challenges of developing a financial plan focused on retirement income and a life plan to help us map how we’ll spend a longer life.

Longevity risk can be tackled with the right plan and financial tools. A few examples: Income annuities can be used to build your own personal pension plan. Reviewing your health care coverage can identify cost savings and potentially improve coverage.

A recent survey revealed that retirees can expect to spend almost $300,000 on health care after age 65. Combating longevity risk means not just looking at investments, but also health care coverage. At Longevity Alliance we help you “look under the hood” of your financial plan, to find ways to make a longer life better.

Steve Zaleznick
CEO, LongevityAlliance