• Harry N. Stout

The Risk of Living Too Long: Why It Matters to Your Money

Updated: May 22


There is great news today! If you are a young adult you are likely to live into your 90s. If you are in your 50s or 60s, the likelihood of living well into your 80s is very high. In fact, regardless of your current age, if you take reasonable care of yourself from a health standpoint and medical advancements continue as they have – life expectancy will continue to lengthen.

But here is the bad news: you are going to need cash income to pay your living expenses for those extra years of life. The risk that you live a very long life and won’t have the cash income to pay your living expenses is called longevity risk. This is a major concern in our society today.


To minimize longevity risk and to accumulate the cash needed to pay your bills later in life, you must have a plan to save and invest to accumulate the money you will need. This plan should take into consideration your personal values, along with key economic, psychological, and emotional considerations. My experience tells me that you need to develop this plan as early as possible once you start working full-time as an adult. If you don’t have a plan today, it is never too late to put one into place.


There are major considerations that will impact your planning and guide how much you will need to save to fund your needs in later life. The major considerations usually are:

  • How long do you want or are able to continue to work for money? Will you switch to part-time in your current job, start a business, or look to be a contractor/consultant?

  • What do you want to do with your post-earning years? How active do you want to be?

  • What is the state of your health? What are your ongoing medical costs? Are you taking many prescription drugs?

  • How long do you project you will live? Does your family have a history of long life spans? Shorter life spans?

  • What do you want to leave, if anything, as a financial legacy for your family, church, college/university, or favorite charity?

  • What lifestyle do you plan on having and maintaining as you cease full-time work? Will you go out to dinner five nights per week, or will you eat at home each night? Will you travel extensively or stay closer to home?

  • What are your family responsibilities? Are you raising or financially supporting your grandchildren? Are you a caretaker for aging parents or an ill child/family member?

  • What are your debt service demands? Do you still have a mortgage? Are you paying your own or your children’s student loans?

All the above considerations, as well as others, need to be incorporated into your plan. You will likely need professional help to create the financial plan that will get you to your goal. My recommendation is to get this process started with a qualified financial planner as soon as you can. Having and working such a plan will enable you to get great clarity with what to do with your money and will help you develop the healthy money habits you need to succeed.

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