Why Longevity Risk Should Be Treated Like a Weather Forecast
By: Mathew Greenwald | September 1, 2026
Longevity risk is one of the most difficult challenges in retirement planning. No one knows how long a client will live, yet assumptions about longevity can have a major impact on investment, spending, and retirement income decisions.
There has been considerable discussion about how retirement planning should account for longevity risk, but much less attention has been paid to how that risk should be presented to clients. A simple longevity assumption embedded in a retirement plan is not enough. Clients need the information to understand the uncertainty they face and help them make informed decisions about how to manage it.
The Standard Approach: One Longevity Age
A common approach financial professionals and planning tools use is to choose a single “longevity planning age” and build the retirement plan around it. The selected age is typically well beyond average life expectancy, providing a prudent margin of safety.
There is nothing inherently wrong with this approach; however, I believe that many advisors use a default longevity planning age for all clients and do not personalize it for gender, health status, and other factors. This metric would be much more effective with more personalization.
A key problem is that the discussion surrounding the planning age is often limited. Clients may simply be told that they should plan to age 90, 95, or some other age because it is a conservative assumption. To many clients, that can seem arbitrary or unrealistic. Research conducted by Greenwald Research suggests that advisors frequently encounter pushback from clients who believe, correctly, they are unlikely to live that long.
More importantly, a single planning age can create a false sense of precision. It obscures information that clients need: the range of possible outcomes and the probability of each. A single longevity planning age, by itself, does not give clients the full context they need to make important decisions about spending, investing, and retirement income.
A Chance of Rain
A useful analogy is the weather forecast. Meteorologists generally cannot predict with certainty whether it will rain tomorrow. Instead, they estimate the probability of rain.
Imagine if weather forecasters did not provide that probability. Instead, they simply told us either to carry an umbrella or leave it at home based on whether the chance of rain crossed some predetermined threshold. We would lose valuable information.
Instead, we are told there is, for example, a 30% chance of rain. We can then decide whether carrying an umbrella is worth it based on our circumstances and our tolerance for the risk of getting wet. Longevity risk should be communicated in much the same way.
A Better Approach: Show the Probabilities
Actuaries cannot predict how long an individual will live, but they can estimate the probability of living to different ages.
The American Academy of Actuaries and Society of Actuaries provide an Actuaries Longevity Illustrator that estimates the probability of living to specific ages based on factors including age, sex, smoking status, and health. For couples, it can also show the probability that one or both spouses will survive to different ages.
Yet our research indicates that advisors often do not provide clients with this type of probability-based information and, when they do, it is not always communicated effectively.
Consider a 65-year-old couple in excellent health. The Actuaries Longevity Illustrator indicates that there is roughly 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. Think about how different that conversation is from simply telling the couple, “We are going to build your plan to age 92 because that is a conservative assumption.”
The probabilities make the risk tangible. A couple might react very differently to learning that one of them has a one-in-four chance of reaching 98 than they would to just being told that an advisor has selected 92 as their planning age. That understanding can affect important decisions. How much should they spend early in retirement? How much investment risk should they take? How important is guaranteed lifetime income? How should they think about delaying Social Security or getting long-term care insurance?
The objective should be to help clients understand the range of outcomes that could occur and the likelihood of each.
Putting the Planning Age in Context
I am not suggesting that financial professionals fully abandon the longevity planning age. It remains a useful planning tool. A financial plan ultimately needs assumptions, and choosing an appropriately conservative age can help protect against the financial consequences of living longer than expected. But the planning age should come after a discussion of longevity probabilities, not substitute for one.
A client who understands that there is a meaningful probability of living into his or her mid- or late 90s is in a much better position to understand why a financial professional recommends planning to an advanced age. What might otherwise seem arbitrary becomes a decision grounded in risk assessment.
Turning Probability into Action
What should a client do differently if there is a 25% chance that he or she, or a spouse, will live to age 98?
Financial professionals need to be able to explain the probabilities they present and, more importantly, connect them to concrete decisions. Questions based on probability should lead directly into discussions about spending, investment strategy, Social Security claiming, guaranteed lifetime income, and other ways of managing longevity risk.
Weather forecasts make uncertainty easier to understand and act upon. Retirement planning should do the same.
