Planning For Longevity

Wow, he made it. Over the past 14 years I have talked about him, written many articles about him and wondered whether he would actually make it to his 100th birthday.

He is an inspiration to me; I have often reflected on his life, especially in times of my own self-doubt, not always because of his advice but because his life is a feel-good story. Everyone loves a rags-to-riches story – self-made wealth which came from hard work, perseverance, trial and error, and an element of risk-taking.

He was born in 1919, ten years prior to the start of the Great Depression and at ten years old an accident that killed both his parents. However, instead of being sent to an orphanage like many other children, his aunt took him and his siblings in and raised them herself.

His aunt did the best she could and made sure he got an education, which in those days meant only the basics: reading, writing and arithmetic. As the only boy in the house and being quite a bit younger than his siblings, he was left out a lot. From early on my grandfather knew that if he wanted something, it was up to him to make it happen. Indeed, he once said that working, being determined and forging ahead – no matter what – was the only direction he would take.

Longevity runs through his family, so when he decided to retire at age 50, he needed to make sure he had enough money and a sustainable income to cover the lifestyle he had built. I am not quite sure whether he expected to hit 100, but when I called him on his birthday and asked about how he had planned, he said that his goal was to never run out of money.

So, how do you plan when longevity becomes a risk to your retirement?

Longevity risk/impact can be defined in two ways:

  • The risk that people outlive their retirement savings.
  • The risk that people underspend their savings, leading to a lower income over retirement.

Outliving Your Retirement Savings

In a practical context, you based the length of your retirement income upon your family dynamics, assuming you will have enough to live on; however, you dodge the gene bullet and live longer – without sufficient resources to cover it.


It seems bizarre, but many retirees are paranoid that they are going to run out of money: they sacrifice a more enjoyable and comfortable retirement largely in order to put some money away for the possibility of greater longevity.

Addressing longevity during your working years is your primary goal, and when you think about your life as three parts, it makes perfect sense. The first part is your younger years: growing up, going to school, etc. The second part is your working years, the years where you achieve your financial goals. The last part is your retirement years: taking the trips you planned or spending time with family, friends, etc. The crazy part is that the second part has to financially fund the second and third parts, so for most of us saving long-term is the only way.

The easiest way to save extra money long-term for retirement is through your pension plan at work. The money goes straight from your pay cheque and is held within your company pension plan. Although these funds are classified as voluntary savings [beyond the mandatory legislative 5% deduction], these funds should be thought of as Long-Term. It might simply be an extra 1% or 2% out of your monthly pay cheque or a fixed amount of $100 or $200 per month, but the fact is you are saving more money for your retirement.

When I think about my age, it is clear that longevity runs in the family, which means I need to put more money aside and I need to make some financial sacrifices today in order to get through retirement comfortably.

Lots of people might say they don’t earn enough, they can’t afford to put more money aside or that their children are their retirement plan. The reality is there are things people can and can’t control. However, retirement is a part of life – whether you are forced into it or you have made the necessary steps in your life to be able to choose when you want to retire.

– Carla Seely is the Vice President of Pension and Investments at FM Group. If you would like any further details, please contact her at or call +1 441 297 8686.