How Long to Plan For

One of the most important — and most uncomfortable — numbers in a financial plan is how long it has to last. Plan too short and you risk outliving your money; plan too long and you may under-spend years you could have enjoyed. The goal is not to predict your lifespan. It's to plan to a sensible, deliberately cautious horizon.

Life expectancy is a midpoint, not a deadline

When we say a 65-year-old's life expectancy is about 21 more years, that's an average. Roughly half of people like them live longer than the average — many well into their 90s. So planning your money to run out exactly at average life expectancy would leave about half of similar households short. That's why your plan uses a planning age set a cushion above the average, not the average itself.

Expected vs. median age

Two related numbers describe "typical":

• Expected age — the average age reached, weighted across all outcomes.
• Median age — the age half of people with your profile reach.

They're close but not identical, and neither is a personal forecast. Your own outcome can land years on either side.

Survival probabilities

Rather than a single number, the clearest way to think about longevity is a set of survival probabilities: your chance of reaching a given age. "About a 6-in-10 chance of reaching 90, and a real chance of living past 95" is honest in a way one number can't be — it shows both the central case and the long tail your plan should be able to fund.

These come from actuarial life tables. Horizons uses the Social Security Administration's public period table, adjusted for what you've told us about sex, smoking, and self-rated health.

Period vs. cohort tables

A period table uses today's death rates at each age. It's a careful, conservative baseline — but it doesn't credit the steady improvement in longevity that medicine and public health keep delivering. A cohort table projects those improvements forward, so a younger person's real expectancy is usually a bit longer than the period table shows. We default to the period table as a floor; treat it as "at least this long," not "at most."

Health and lifestyle

Four inputs move the estimate meaningfully: age, sex, smoking status, and self-rated health. A lifelong non-smoker in excellent health plans to a longer horizon than the population average; a current smoker, a shorter one. Sharing these refines your estimate — and you can always see and override the result.

Couples: plan to the second death

For a couple, the money usually needs to last until the last survivor dies, not the first. So two figures matter:

• First-to-die (joint life expectancy) — when the household likely drops to one income and one set of expenses.
• Last-survivor — the planning-relevant horizon; this is what the suggested couple planning age tracks.

We also show the odds that both of you are alive vs. at least one of you is alive at future horizons, because they drive very different decisions (when to claim Social Security, how much survivor income to secure).

Why it matters

Your planning horizon quietly sets almost everything downstream: how long your forecast must fund, whether claiming Social Security later pays off (it usually does the longer you live, because it raises guaranteed lifetime income), and how long an insurance need really runs. Getting the horizon roughly right — and erring a little long — is one of the highest-leverage assumptions in the plan.

The bottom line. Life expectancy is a midpoint. Plan to a deliberate cushion past it, look at the survival probabilities rather than one number, and for couples plan to the last survivor.