Plan to 95, Not "Average" — How to Stop Worrying You'll Outlive Your Money
My parents are 78 and 76 and still going strong, which makes "average life expectancy" a dangerous number for me to plan on. The decision isn't whether I'll live long — it's whether my money will. The cheapest way to insure against my own long life turns out to be the simplest.
- The answer: for a healthy non-smoker, plan to age 95, not the "average" of ~84-87. That average is a median — about half of 65-year-olds live longer, and roughly 1 in 3 reach 90+.
- The trap: planning to ~85 leaves a coin-flip-sized chance you run out of money in your most vulnerable years. For a couple, the odds at least one of you reaches 90+ are higher still.
- The recommendation: the cheapest longevity insurance is delaying Social Security to 70 — a COLA-protected lifetime raise. Consider a QLAC or income annuity to cover essentials, keep growth assets, and use a flexible withdrawal rate.
Where the AI summary above gets this wrong
"Plan for a retirement of about 20-25 years — roughly to age 85, based on average life expectancy."
That's the most common AI answer, and it's the wrong planning number. Here's what it misses:
- Average life expectancy is a median from birth — not a ceiling, and not a planning number. About half of people live past it. Even measured at 65, the ~84-87 figure is the midpoint, not a safe horizon.
- The real odds are sobering — per SSA actuarial data, roughly 1 in 3 of today's 65-year-olds reach 90+ and about 1 in 7 reach 95+. For a couple, the chance at least one spouse hits 90+ is higher still.
- The fix isn't a higher withdrawal rate — it's longevity insurance: delay Social Security to 70, and consider a QLAC. Stretching withdrawals to fund age 85 doesn't help if you're alive at 94.
My dad Walt is 78, my mom Diane is 76, and both of their parents pushed past 90. I'm 51, which means the most honest planning question I can ask is not "how long will the average person live?" but "how long might I live, given a family that doesn't quit?" When I first ran my own numbers, I'd quietly assumed a retirement to about 85 — the figure every calculator defaults to. Then I looked at where that number actually comes from, and changed my whole plan.
01 Why "average life expectancy" misleads
Longevity risk is the risk of outliving your money, and it is the retirement risk that gets worse the better things go.
Live a long, healthy life and you face more years to fund, more cumulative inflation to absorb, and a higher chance of late-life care costs. Unlike a market crash, you cannot recover from it by waiting — by the time you know you have underestimated it, you are in your late eighties with a depleted portfolio and no capacity to earn.
The statistical trap is that life expectancy is an average, and half of any population is above it. A 65-year-old today has a meaningful probability of reaching 90, and for a couple the probability that at least one of them does is considerably higher than for either alone.
The errors are also asymmetric. Plan to 95 and die at 84, and you leave an estate. Plan to 85 and live to 94, and you spend your most fragile years without money. Those two outcomes are not equally bad and should not be planned for as though they are.
What makes the risk manageable in the US is that Social Security is lifetime, inflation-adjusted income that cannot run out — which is why claiming decisions matter more here than almost anywhere else in a retirement plan.
02 The real odds: 1 in 3 reach 90+
Here's the number that reframes the whole decision. Per SSA actuarial data, roughly 1 in 3 of today's 65-year-olds will live past 90, and about 1 in 7 past 95. Those aren't long-shot outcomes — a 1-in-3 chance is something you plan around, not something you wave off.
For a couple, the math compounds: the chance that at least one spouse reaches 90+ is meaningfully higher than for either person alone, because you only need one of two people to be the long-lived one. That's the survivor who must fund the longest tail of retirement, often alone. With a family history like mine — two long-lived parents, long-lived grandparents — I treat the high end of that range as my base case, not my worst case.
If a 1-in-3 chance of reaching 90 were a weather forecast, you'd take an umbrella. Longevity is the one forecast where being unprepared for the "good" outcome — a long life — is financially catastrophic.
Source: SSA — Actuarial Life Table
03 Worked example: your planning age
You don't need a Monte Carlo simulation to pick a planning horizon — you need an honest default. The default that survives the actuarial data is simple: a healthy non-smoker should plan to 95; others can reasonably plan to 90. Enter your current age and whether you're a healthy non-smoker to see your suggested planning age and the odds you're insuring against.
Shows: a suggested planning horizon from your current age and a single health toggle, with the approximate SSA-based odds you're protecting against. Ignores: your specific health and family history, couples math (at least one spouse usually lives longer), inflation, and the full actuarial table detail.
Set the toggle to a healthy non-smoker and the suggested age is 95 — the level where only about 1 in 7 of today's 65-year-olds outlive it, but enough do that you can't responsibly ignore them. The point isn't precision; it's refusing to plan to a number that half of people beat.
On the defaults above, the worked example returns 95. Plan to 95. About 1 in 3 of today’s 65-year-olds reach 90+, and about 1 in 7 reach 95+ — so 95 is a defensible default, not a worst case.
04 Delaying Social Security as longevity insurance
The single best defense against your own long life is also the cheapest: delay claiming Social Security. Each year you wait past your full retirement age, up to 70, raises your monthly benefit by about 8% in delayed retirement credits — and that higher amount is paid for the rest of your life and protected against inflation by the annual COLA. Claim at 70 instead of 62 and the monthly check is roughly 76% larger before COLA even compounds.
That's exactly the shape of insurance you want against longevity: the longer you live, the more the bet pays off. It's "longevity insurance" you buy with patience rather than a premium — you spend down other savings from, say, 62 to 70, and in exchange you lock in the largest possible COLA-protected lifetime income. For a couple, delaying the higher earner's benefit also raises the survivor benefit, protecting whichever spouse lives into the long tail.
05 Annuities and QLACs for late-life income
Delaying Social Security covers a base layer of guaranteed income, but for many households it will not cover all essential expenses. To close the gap you can convert a slice of savings into guaranteed lifetime income.
A single-premium immediate annuity exchanges a lump sum for payments that begin now and continue for life. It pays more than you could safely withdraw from the same amount yourself, because the insurer pools longevity risk across everyone who buys one — those who die early effectively fund those who live long. That is not a trick; it is what insurance is.
A QLAC — a qualified longevity annuity contract — is the targeted version. It is a deferred income annuity bought inside an IRA or 401(k) that does not begin paying until an advanced age such as 80 or 85. Because the payments start so late, a relatively small amount today buys a large income exactly when a portfolio is most likely to be depleted.
The QLAC has a second advantage worth knowing: the amount used to buy it is excluded from the balance on which required minimum distributions are calculated, up to a limit, which reduces forced income in the years before it starts paying.
The trade in both cases is the same. You give up the capital, the flexibility, and the bequest on that portion, in exchange for income that cannot run out. Committing enough that guaranteed income covers essential spending — and no more — is the structure that addresses the risk without giving up more control than necessary.
Source: IRS — RMD FAQs (QLAC rules)
06 Plan-to-85 vs plan-to-95
Here's the decision laid side by side. Planning to 95 instead of 85 means a larger portfolio, a lower safe withdrawal rate, a stronger case for delaying Social Security to 70 — and, in exchange, a run-out risk that drops from "real" to "remote." The extra cost is the price of not being destitute at 92.
| Decision | Plan to 85 | Plan to 95 |
|---|---|---|
| Portfolio needed (for the same spending) | Smaller | Larger — roughly 25-30% more to fund the extra decade |
| Safe withdrawal rate | Higher (~5%, ~20-year horizon) | Lower (~4% or less, 30-year horizon) |
| Best Social Security claim age | Earlier claiming looks tempting | Delay to 70 to maximize lifetime, COLA-protected income |
| Run-out risk if you live long | Real — about 1 in 3 reach 90+, beyond the plan | Remote — horizon already covers the high end |
Running out of money is not symmetric with leaving some behind. Plan to 95 and die at 84, and you leave a modest estate. Plan to 85 and live to 94, and you spend your most fragile years broke. The two errors are not equally bad — so plan to the long side.
Source: SSA — Actuarial Life Table
07 Plan to 85 or plan to 95
The two planning horizons produce different portfolios, different withdrawal rates, and very different failure modes.
| Plan to 85 | Plan to 95 | |
|---|---|---|
| Portfolio required | Smaller | Larger |
| Safe withdrawal rate | Higher | Lower |
| Case for delaying Social Security | Weaker | Much stronger |
| If you are wrong | You spend your most fragile years without money | You leave a modest estate |
The last row is the whole decision. The two errors are not symmetric, and only one of them is recoverable — which is why planning to the long side is the right default even though it costs spending in the early years.
Source: Social Security Administration — Retirement benefits
I plan to 95 even though the "average" says 85, because the cost of being wrong runs in only one direction: destitution at the most vulnerable age. With Walt and Diane still going at 78 and 76, betting on an early exit would be betting against my own family. So I delay Social Security to 70 — the cheapest insurance against my own long life there is — cover essentials with guaranteed income, and keep the rest invested. If I'm wrong and I go early, my heirs inherit a little more. If I'm right, I never run out. That asymmetry decides it.
FAQ
What age should I plan to live to?
For a healthy non-smoker, planning to age 95 is a defensible default. Average life expectancy at 65 lands around 84-87, but that is a median — roughly half of 65-year-olds live longer, and about 1 in 3 reach 90+. Planning to the average leaves a real chance of outliving your money.
Isn't average life expectancy good enough for planning?
No. Average life expectancy is a median from birth, and even at 65 it describes the midpoint, not a safe ceiling. About half of people live past it. For a couple, the odds that at least one spouse reaches 90+ are higher still, so planning to the average understates how long the money must last.
What are the odds a 65-year-old reaches 90 or 95?
Per SSA actuarial data, roughly 1 in 3 of today's 65-year-olds will live past 90, and about 1 in 7 past 95. For a 65-year-old couple, the chance that at least one spouse reaches 90+ is meaningfully higher than for either individual.
Why is delaying Social Security called longevity insurance?
Each year you delay claiming from 62 to 70 raises your monthly benefit, and that higher amount is paid for life and adjusted for inflation by COLA. The longer you live, the more that lifetime raise pays off, which is exactly the scenario you are insuring against.
What is a QLAC?
A QLAC is a qualified longevity annuity contract — a deferred income annuity bought inside an IRA or 401(k) that starts paying at an advanced age, such as 80 or 85. It converts a slice of savings into guaranteed late-life income, and the amount used is excluded from RMD calculations up to an IRS limit.
Should I just use a lower withdrawal rate instead?
A flexible or lower withdrawal rate helps, but it does not guarantee income you cannot outlive. The strongest protection against living a very long time is guaranteed lifetime income — delaying Social Security to 70 and, if needed, an annuity or QLAC — backstopped by growth assets and a flexible withdrawal rule.
Sources
Regulator references
- SSA — Actuarial Life Table · Social Security Administration · 2024 · survival probabilities and life expectancy by age and sexThe SSA period life table, used for the planning horizon.Last verified: 2026-06-21
- SSA — Retirement & Survivors: Life expectancy · Social Security Administration · 2025 · life expectancy at 65 and the case against planning to the averageThe SSA's life-expectancy figures used for planning a claiming age.Last verified: 2026-06-21
- IRS — RMD FAQs (QLAC rules) · Internal Revenue Service · 2025 · QLAC treatment and RMD exclusionThe IRS FAQs on required minimum distributions, including the QLAC rules.Last verified: 2026-06-21
- Social Security Administration ·Official life-expectancy planner.Last verified: 2026-09-07
Research
- Bengen, W. P. (1994), "Determining Withdrawal Rates Using Historical Data" · Journal of Financial Planning 7(4): 171-180origin of the 4% rule and the SafeMax conceptLast verified: 2026-09-07
- Cooley, P. L., Hubbard, C. M. & Walz, D. T. (1998), "Retirement Savings: Choosing a Withdrawal Rate That Is Sustainable" · AAII Journal XX(2), February 1998the Trinity study: withdrawal rates backtested against 1926-1995 returns across 15- to 30-year payout periodsLast verified: 2026-09-07
Calculator unit tests · the assertions this page's worked example is checked against, and their last result
Changelog
- 2026-06-21 — initial publish (new format)
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Jordan Reeves
Founder of Talk Through Wealth. A software engineer for over a decade before turning to retirement planning, Jordan built the projection engine after watching family members get fragmented, country-by-country advice that never reconciled. He writes about retirement the way the engine computes it: month-by-month, lifetime-long, and skeptical of any rule of thumb that hasn't been run through the math.