Planning for 30 Years—or 40? The New Reality of Retirement Duration

From 30 Years to 40—and Sometimes More 

For decades, advisors modeled retirements around a 30-year horizon—retiring at 65, planning income through 95. But today, that assumption is showing its age. According to the Social Security Administration and the Society of Actuaries (SOA), nearly one in three 65-year-old men and almost half of 65-year-old women will live past 90. Among healthy, higher-income couples, SOA longevity tables indicate roughly a one-in-four chance that at least one partner will live to age 95 or beyond—underscoring how retirement horizons have stretched for the most financially secure households. 

That shift isn’t theoretical. Longevity has been rising for decades, particularly among retirees with access to quality healthcare, balanced lifestyles, and advances in disease management. The “average” 20-year retirement is fast becoming a 30- to 40-year reality—sometimes longer. 

The Longer-Horizon Effect on Income and Risk 

Extending the time horizon even five or ten years can dramatically change how sustainable a retirement portfolio appears. The classic 4% withdrawal rate, once considered safe over 30 years, becomes far less reliable when tested over 40. Research from Morningstar and economist Wade Pfau suggests that for longer durations, initial withdrawals closer to 3.3%–3.5% may offer greater sustainability, especially in volatile or lower-yield markets. 

Longer retirements also compound sequence-of-returns and inflation risks. A market downturn early in retirement can have lasting effects when the portfolio must support four decades of spending. Advisors are responding with dynamic withdrawal strategies, blended income approaches, and stress tests that illustrate how even modest changes—such as delaying Social Security or moderating withdrawals—can preserve long-term sustainability. 

The key insight: longevity amplifies every other risk in the plan. Inflation, healthcare costs, and market volatility all have more time to work against the portfolio, making flexibility an essential feature of any modern retirement strategy. 

Reframing the Conversation with Clients 

Clients rarely think in probabilities—they think in lifetimes. Saying “you have a 25% chance of living past 95” doesn’t resonate until you frame it as “there’s a one-in-four chance one of you will still be here in 2060.” Framing longevity this way shifts the focus from if they’ll live that long to what happens if they do. 

Advisors can use research-based tools—such as the Society of Actuaries’ Longevity Illustrator or projections from the Stanford Center on Longevity—to show how different life spans affect withdrawal rates, income needs, and risk tolerance, when clients see longevity as a real probability rather than an abstract number, the discussion shifts from fear of outliving assets to confidence in managing a longer life well. 

Closing Thought 

Planning for 40 years of retirement isn’t just a mathematical exercise—it’s a mindset shift. Advisors who integrate realistic longevity data, flexible spending rules, and adaptive income sources can help clients sustain financial confidence for as long as life lasts. 

Takeaways 

• SOA longevity tables show roughly a 25% chance that one member of a healthy couple will live to 95 or beyond. 

• Longer retirements magnify every major risk—market, inflation, and healthcare—requiring dynamic income strategies. 

• Framing longevity as a probability, not a fear, helps clients embrace flexibility and plan for confidence over the long haul.