Why Longevity Risk Should Be Treated Like a Weather Forecast
By: Mathew Greenwald | September 1, 2026
Many people struggle to plan for retirement because longevity risk is difficult to understand and even harder to translate into investment and spending decisions. There has been discussion about how to handle longevity risk from a planning standpoint, but very little about how longevity risk should be presented to and discussed with clients. This omission is unfortunate because in order for a financial plan to work well, it is essential that clients not only understand longevity risk, but have enough information to make decisions about how to effectively manage it.
The Standard Approach: One Longevity Age
The standard approach used by many financial professionals and planning tools is to choose a single “longevity planning age” and build the plan around that target. The chosen age is typically well beyond average life expectancy to create a margin of safety. The logic is understandable. It is prudent to build in a cushion.
However, the discussions financial professionals have with their clients about the longevity planning age is often very limited. Little information is provided except that this age is recommended because clients are unlikely to live beyond it or even reach it. But this can feel arbitrary or unrealistic to clients. Research conducted by my company suggests that many advisors encounter pushback from clients who say they think it is unlikely that they will live that long.
One planning age can create a false sense of precision. It obscures the information clients need most: the range of outcomes and the probability of each. By focusing on a single age, advisors may unintentionally make it harder for clients to understand the real longevity risk they face, and the tradeoffs involved in planning for it. Suggesting a single longevity planning age certainly does not give clients enough information to make crucial investment and spending decisions.
A Chance of Rain
A helpful analogy is the weather forecast. Just as actuaries cannot predict the exact age to which a person will live, meteorologists usually cannot predict with certainty whether it will rain the next day. However, they can estimate the probability of rain. A forecaster could advise people to plan for rain whenever the chance reaches a certain threshold, such as 50%. But that would be a poor way to communicate risk. Telling people to plan for rain when the likelihood is 50% means being wrong half the time. Telling them not to plan for rain when the probability of rain is lower, such as 30%, means being wrong nearly one-third of the time. The better approach, which has worked very well, is to tell people the likelihood of rain and let them use that information to decide whether to carry an umbrella. The public has accepted this approach and feel sufficiently informed to make decisions about clothing and planning. This approach has also enhanced confidence in weather forecasters. We are all used to hearing, for example, that there is 30% chance of rain.
A New Approach: Probability of Outcomes
Retirement planning discussions should work the same way. The necessary information is readily available. For example, the American Academy of Actuaries (AAA) and the Society of Actuaries (SOA) provide an Actuaries Longevity Illustrator that estimates the probability of living to specific ages for those at different health levels. It also estimates the likelihood that one member of the couple, or both, will live to those ages. Yet our research indicates that advisors often do not provide this probability-based information, and those who do often do not communicate it effectively.
Providing and clearly discussing these probabilities can lead to better decisions. It can also strengthen the case for guaranteed lifetime income. For example, the AAA and SOA calculators show that a 65-year-old couple in excellent health has a 50% chance that at least one spouse will live to age 94 and a 25% chance that at least one will live to age 98. That information is far more useful than simply telling the couple to plan to age 92 because it is a “conservative” estimate they may never reach. Longevity is best understood not as a prediction of a single age, but as a set of probabilities that clients can understand, discuss, and plan around.
Just to be clear, I am not suggesting abandoning the single longevity planning age. This concept certainly has value that should not be lost. But it should be defined after a full discussion of probabilities. That will give clients the understanding and context they need.
The next step is clear. Financial professionals should not only provide longevity probabilities, they should also be trained to present them effectively and connect them to practical planning decisions, including investment strategy, spending strategy, and the potential role of guaranteed lifetime income. Clients do not simply need a longevity planning age that pretends to resolve uncertainty. They need a clearer picture of the uncertainty itself and guidance on how to navigate it.
