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Mark Miller: Remaking Retirement

How Life Expectancy Affects Retirement Planning

Morningstar contributor Mark Miller looks at longevity assumptions used most in retirement plans. Are they realistic?

Retirement plans revolve around two critical numbers: your retirement date and how long you will live past that point. It's possible to forecast or even control your retirement date--sometimes. But--to state the obvious--any date you pick for your mortality is just a guess, for most of us anyway.[1]

Most financial advisers assume extreme longevity in their retirement plans as a way to "test" the odds of success against longevity risk. Clients often see illustrations assuming a lifespan of 95 or 100. And certainly, some of us will be fortunate enough to reach those lofty numbers.