Longevity, The Retirement Risk Most People Underestimate

Most of us spend decades in what I call the “saving years”, quietly putting money away and hoping compounding does its thing. Then retirement arrives, and suddenly the direction of travel flips. You stop topping up your pot and start living off it.

It sounds simple, but the mindset shift can be a big one. And with it come two major risks, one that gets far too much attention and another that barely gets a look in.

Let’s break them down.

The Usual Suspect, Volatility

Retirees often worry themselves sick about market drops. Headlines, politics, global events, you name it. When prices fall, the fear is you’ll be forced to cash in units at a lower price to fund your spending. Fair concern, but not the end of the world.

Volatility is completely normal, it always has been. Markets rise over time, but never in a neat straight line. Temporary declines happen without warning and often make a lot

of noise on the way down.

Good planning can blunt the impact. Keeping a sensible cash buffer for withdrawals during rough patches is one tool of many. Patience and discipline do the rest. Temporary declines do not have to cause permanent damage when your plan is built properly.

The Real Threat, Longevity

This is the one hardly anyone talks about, yet it is the one that genuinely moves the needle.

People are living longer, far longer than previous generations ever expected. A retired couple today has around a one in three chance that one of them makes it to age 95. That is potentially thirty years of living costs, healthcare, and the odd curveball that life likes to throw in.

Many retirees underestimate how long their money needs to last. The danger is they become so fixated on short-term market movements that they forget the real job, which is building an income that rises with inflation for decades, not years.

To do that, you often need to stay invested and avoid retreating at the first sign of trouble. Longevity rewards those who take the long view and punishes those who plan for a ten-year retirement when they might need thirty.

A New Retirement Reality

Longer lives change everything, the mindset, the planning approach, even the basic rules of thumb people have used for years. This is exactly why evidence-based planning and regular reviews matter. You cannot take a thirty-year retirement lightly.

Even those still in their saving years need to rethink how much is enough. A longer future needs a bigger engine.

The world is shifting. Retirement is shifting with it. The question is whether your plan is keeping pace.

If you want to understand what increasing longevity means for your own retirement journey, We are here to help you make sense of it and make sure your plan stays ahead of the curve.

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