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Is It Possible You Could Outlive Your Savings?

Filed under: Retirement, Taxes and Planning, Social Security Planning, Estate Planning

Tagged with: · ·

Most people dream of living a long, happy retirement. But what happens when your retirement lasts longer than you’d expected? Unfortunately, that’s a question many retirees will have to answer in coming years.

Recent studies show that, thanks to advances in medicine and technology, people are living longer than ever. A recent report from the Centers for Disease Control and Prevention revealed that the number of Americans age 100 or older increased more than 43 percent from 2000 to 2014.1 An additional study by the Pew Research Center predicted that globally there will be 3.7 million people age 100 or older by 2050.2

There’s a very real chance your retirement could last 40 years or more if you retire in your late 50s or early 60s. In fact, you may spend more time in retirement than you did saving for retirement. Such longevity may put a strain on your finances. The good news is there are steps you can take to plan ahead and maximize the number of years your funds last. Below are a few tips on how to manage the longevity risk:


Don’t be afraid to take some risks.


The instinct to avoid financial risks and limit investment losses in retirement is natural and understandable. After all, a downturn in the market has the potential to impact your retirement income and your ability to support yourself.

By being too conservative, however, you could create other financial challenges. Growth is often necessary to fight inflation and help your savings last decades. Very often, growth and risk go hand in hand. If you try to avoid risk, you may also limit your growth potential.

You can work with your financial professional to develop a strategy that strikes the ideal balance of growth potential and risk management. Annuities may be an option to consider, as they can offer both growth potential and downside protection.


Create sources of guaranteed lifetime income.


If you’re like many retirees, you may have only one or two sources of guaranteed* lifetime income, such as Social Security or a pension. However, developing additional sources of guaranteed* lifetime income can provide more steady cash flow to help support you through the later years of retirement. There are several ways you can use your savings to create your guaranteed* lifetime income stream.

Annuities are one potential strategy. There are several different types of annuities, many of which have options to generate guaranteed* lifetime income. The amount of income an annuity offers depends on the terms and features of the policy. You can explore your options with a financial professional to discover whether an annuity might be the right step for you.


Delay Social Security to maximize your payments.


Waiting to file your Social Security claim can be a beneficial strategy to increase the amount of your payments, which could help you manage rising costs in the later years of your life. You receive an 8 percent increase in your benefit for every year after your full retirement age that you wait to file. It’s possible to delay filing up to age 70.3 For example, this means if your full retirement age is 66 and you delay filing until age 70, your benefit will increase 32 percent.3

Ready to plan your long, happy retirement? Let’s talk about it. Contact us at Ambrose Financial & Insurance Services. We can help you analyze your needs and develop a strategy. Let’s connect soon and start the conversation.






*Guarantees, including optional benefits, are backed by the claims-paying ability of the issuer, and may contain limitations, including surrender charges, which may affect policy values.


Licensed Insurance Professional. This information is designed to provide a general overview with regard to the subject matter covered and is not state specific. The authors, publisher and host are not providing legal, accounting or specific advice for your situation. By providing your information, you give consent to be contacted about the possible sale of an insurance or annuity product. This information has been provided by a Licensed Insurance Professional and does not necessarily represent the views of the presenting insurance professional. The statements and opinions expressed are those of the author and are subject to change at any time. All information is believed to be from reliable sources; however, presenting insurance professional makes no representation as to its completeness or accuracy. This material has been prepared for informational and educational purposes only. It is not intended to provide, and should not be relied upon for, accounting, legal, tax or investment advice. This information has been provided by a Licensed Insurance Professional and is not sponsored or endorsed by the Social Security Administration or any government agency.

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