The biggest risk to retirement plans may no longer be a stock market crash or inflation
What age does your retirement plan run to?
For most people, the answer is somewhere in their mid-80s or early 90s. That has always sounded conservative — or at least, reasonable. It may no longer be.
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For decades, the biggest risk to financial plans were external economic failures, like market crashes, inflation, interest rates, taxes, sequence of returns or bear markets.
Now, the biggest risk may be that science succeeds.
We may well be on the cusp of the most important longevity surprise in modern financial planning. And many financial plans may be built around the wrong end date.
A portfolio can recover from a bear market.
A financial plan built for age 90 may crumble if a person lives to 110.
The assumption
Most retirement plans are built around a tool called the Monte Carlo analysis. It runs thousands of simulations across different market environments, testing whether a portfolio can support spending and goals across a range of outcomes. It models bear markets, inflation spikes, interest-rate changes and tax scenarios.
It is sophisticated. It is useful. And it has a blind spot.
Monte Carlo models run thousands of scenarios to effectively stress-test a
portfolio. But one of the most critical variables, lifespan, might be treated as a fixed input, or have an upper limit that doesn’t extend far enough.
Many planning-software programs automatically set a single end age or ask advisers to enter one upfront, often built from a rule of thumb, such as 25 to 30 years after a 65-year-old retires. That number sits quietly inside the model, rarely questioned. And it may be the most consequential assumption in the document. In other words, your financial plan should model for your own potential longevity.
The surprise
None of this is a prediction everyone will live to 110 — only a small fraction of people even reach age 100. But the U.S. centenarian population is growing, rising 50% from 2010 to 2020, so longer lives are a real consideration.
It is a planning argument: If the range of possible lifespans is widening, the plan you rely on should account for it.
Today, breakthroughs across multiple disciplines are occurring in parallel. Artificial intelligence is helping to accelerate drug discovery. Gene editing continues to progress. Diagnostics are becoming available earlier and on an ongoing basis. Wearables are producing health data at a scale no prior generation had access to. Precision medicine is improving. Billions of dollars are flowing into therapies targeting age-related diseases specifically. Even obesity, which connects to so many chronic illnesses, is being approached differently through GLP-1 drugs and related therapies. Any one of these changes could matter. Together, they fundamentally change the equation.
Retirement may need a rewrite
For most of the 20th century, retirement had a familiar shape. Work for decades. Retire around 65. Spend down assets. Plan for a final chapter of 20 or 30 years.
By 2050, retiring at 65 and stepping away entirely for 40 years might seem as unusual as retiring at 40 sounds today.
This changes housing, healthcare, spending and philanthropy. If parents live into their 100s, heirs may not receive a meaningful inheritance until they are in their 60s or 70s, potentially after their own retirements have already begun. Plans built around an earlier wealth-transfer timeline stop working on a longer one.
The risk of success
Financial planning has typically treated a long life as a blessing and an early death as the tragedy to guard against.
Emotionally, that is true. Financially, it is more complicated.
What happens to a healthy, active 65-year-old whose plan was designed for 25 years of retirement if they live an additional 40 or 45 years instead? What if they travel longer, support children longer, give more actively, and spend more dynamically into their 80s and 90s than traditional models assume? What if spending does not decline in later years the way plans expect?
A 25-year retirement is one financial problem. A 45-year retirement is a different one entirely.
What to do
The underlying portfolio framework needs to treat longevity not as a fixed end date but as a variable, the same way market risk is modeled across a range of outcomes. The question it forces is the right one: If health improves and science delivers on even a fraction of what is currently in development, does this plan still work?
Beyond the modeling conversation, longer potential lifespans have practical implications worth addressing now. How much flexibility is built into your spending plan? How is healthcare funded across an extended horizon? Are your estate documents structured for the timeline you actually expect, or the one your plan assumed? These are not outlandish questions. They are the basic questions of a plan built honestly for the life you may actually be living.
The blind spot
The financial industry is very good at imagining market pain. We model recessions, drawdowns and bad decades with rigor and sophistication.
We may be under-modeling one of the most profound possibilities in front of us: that people live significantly longer, healthier and more active lives than prior generations imagined.
The biggest planning surprise may not be that the portfolio fails. It may be that the person keeps living. And living well.
Make sure your plan is built for that possibility.
Matt Fleissig is the co-founder and CEO of Pathstone, a national wealth-management firm serving ultra-high-net-worth families.
Disclosure: Matt Fleissig is the CEO of Pathstone Family Office, LLC (“Pathstone”), an SEC-registered investment adviser. This article is for informational purposes only and does not constitute investment advice, a recommendation, or an offer or solicitation to buy or sell any security. The views expressed are those of the author as of the date of publication and are subject to change without notice. Pathstone and its affiliates may have positions in or provide advisory services related to securities or strategies discussed herein. Past performance is not indicative of future results. For more information, please visit adviserinfo.sec.gov.