Longevity planning: How RIA firms can help clients prepare for a longer life

Americans are living longer than ever. Today, the average 65-year-old in the U.S. can expect to live an additional 20 years.¹ If trends continue, the average millennial could live well past 90. While living longer is good news for all of us, it also introduces challenges.

Long(er) life means needing more retirement savings to live how you want and keep up with medical expenses. It also means more time for needs and goals to change.

Enter longevity planning (and a trusted financial advisor). Money + time is an interesting equation; one many clients aren't prepared to calculate. That's why Joseph F. Coughlin, founder and director of the MIT AgeLab, has created a framework for how to approach conversations about aging with your clients. As their advisor, you can help them build a responsive and resilient financial future across many decades of life in retirement.

From retirement planning to longevity planning

Coughlin's point is simple: as lifespans stretch, retirement planning can't be a date and a number—it requires an entirely different approach.

When retirement lasts 20–30+ years, your clients' goals can change—and their plan should, too. As an advisor, you can build a plan that's flexible so clients trust that you (and their plan) can respond to life's twists and turns. Planning with longevity in mind helps clients be ready for times when they need to revisit priorities, spending, and health assumptions. Rather than viewing adjustments as negatives, they're more likely to see them as a normal part of ongoing planning.

"Asking a 45-year-old what they're going to be doing in retirement is like asking an 18-year-old what they're going to do in their midlife crisis," says Coughlin. They need you to help them envision their best life in retirement, not just at age 65 or 70, but for decades.

Coughlin thinks about retirement as a series of phases. This is a practical way to help clients get specific about what they want (and when). The MIT AgeLab outlines four retirement phases you can use to guide longevity planning: the honeymoon, the big decision, navigating later years, and the possibility of living alone.

The four phases of retirement

MIT AgeLab's four phases aren't a tidy progression. Many people bounce between phases over time. The key is understanding how well-being, physical health, and social connections change in each phase and how a client's financial plan can help them make the most of different periods of life.

The honeymoon

For a lot of people, retirement isn't a clean "before" and "after." They might step away from work, come back to their career, find a sideline gig, or skip the label altogether.

Early on, people often want to stay active and connected. It's common for clients to work part-time or even launch a new business after "retiring." However they kick off retirement, you can help them see how continuing to work affects their savings, how much to withdraw from their accounts, and what it means for Social Security benefits.

The big decisions

Earlier in life, people make decisions based on commutes and nearby schools. But once the kids have moved out and there's no office to go to, many people rethink where and how they want to live.

This is a phase when they may need you to ask the big questions and help them design their best life in retirement. With your help, they can turn hopes into a real plan that works financially.

Navigating longevity

Health can be unpredictable. Most people don't expect to get sick or to have to deal with long-term health issues. Yet, for many, health problems dominate their later years of retirement.

As health questions emerge, you can help clients plan for medical expenses and check in on their goals. They may have to adjust their expectations, but your steady guidance can help them face uncertain times with confidence.

The solo journey

One of the hardest parts of aging is losing friends and loved ones. Life can get lonely. Boring, even. Your clients may feel like they don't have many places to go or people to see.

This is a time to help them refocus on what brings them joy. Talk about the people, places, and activities that make them happy and encourage practical steps, like reconnecting with friends and family, signing up for classes or events, or taking a trip they'd enjoy. Remind them that their plan and hard-earned savings give them options.

Life is a long, interesting conversation

When you bring longevity into your thinking and planning, ask your clients a simple question: What phase do you feel like you're in right now? You'll have your own observations, but if a client sees things differently, they may not be responsive to your advice.

Next, walk through what each phase might look like. Post-retirement work, classes and training, new living arrangements, health risks, bucket-list goals—there's a lot to consider. Have them put it all out there, then position it as a starting point that you'll revisit often.

Longevity conversations also mean getting comfortable with change. Maybe they can't do a favorite activity anymore, or life doesn't unfold the way they pictured (even something like not having grandchildren). While this can be disappointing, it also means that the money or time they'd set aside can now be used for something else that matters.

Money, health, and relationships are very personal and sometimes clients are uncomfortable going there. Longevity planning gives you a way to normalize the conversation and remind them that they have choices in how they respond to whatever life brings. None of us are getting any younger, but with your help, your clients can use their savings to create options and keep building a life of fulfillment and meaning.

What you can do next

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