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Written by: Jon Sabes
Put a hundred of your sixty-five-year-old clients in one room.
The tables say the men have about eighteen more years and the women about twenty-one. Now watch what happens. A handful will be gone within five years. Cancer nobody saw coming. A heart attack on a Tuesday morning. Another cluster goes in their early seventies. The bulk live into their late eighties. One in four reaches ninety. One in ten gets past ninety-five. Two or three outlive the table entirely.
Not one of those people is average. Every one of them dies before that number or after it. The average is a midpoint almost nobody lands on.
Here is the part that should stop you. Every person in that room is planning against that number anyway. They saved against it. They will withdraw against it. They timed their Social Security claim against it. Half are planning for a horizon that is too long. Half are planning for one that is too short. And nobody will know which half they were in until the day they die.
Not the client. Not the actuary. Not you.
A group statistic cannot describe a person
Life expectancy tells you how a population behaves. It has nothing to say about the individual sitting across your desk. She is not a distribution. She is one draw from it.
Call it the N-of-One problem. Statistics can tell you what share of a cohort will be alive at eighty-five. They cannot tell you whether your client is in that group. No model closes that gap, and no amount of Monte Carlo output makes it disappear.
This used to be a smaller problem. When retirement ran twelve or fifteen years, being wrong by five years was uncomfortable but survivable. The range today runs from five to thirty-five years. Being wrong now means being wrong by two decades.
Think about what that does to the plan you built. A sixty-five-year-old with five years left and a sixty-five-year-old with thirty-five years left are not running two versions of the same plan. They are running two different plans. Different withdrawal math. Different risk tolerance. Different housing decisions. Different everything.
And both clients look identical when they sit down with you.
What changes when you plan for a range
Run the plan at the tails, not the middle. Most plans get built around a single terminal age. Eighty-five, maybe ninety, because that is where the tables point. Build the plan to fail instead, and find out where it fails. Ask what happens at ninety-five. Then at one hundred. If the plan breaks at ninety-three, your client should learn that now, while there is still time to do something about it.
Give the money two different jobs. One pile has to cover the essentials no matter how long your client lives. Housing, food, utilities, basic healthcare. That money should not depend on a lucky sequence of returns or a lifespan assumption that turns out wrong. The other pile funds everything above the floor, and it can carry market risk. Clients grasp that division instinctively. Most plans never make it explicit.
Change the question the plan answers. “How much have I saved” is the wrong question, and the industry has trained a generation of clients to ask it. The better question is how much income those savings will produce, and for how long. A balance is a number on a statement. Income is something a client can build a life around.
Rebuild the assumption every year. Here is a piece of longevity math most clients have never heard. Every year they survive, their expected remaining lifespan gets longer. Make it to seventy-five and the finish line has moved out from where it sat at sixty-five. A plan built once against a fixed endpoint goes stale. It has to be reset as the client ages into a different distribution.
The conversation is harder. Have it anyway.
I understand why the profession drifts toward the average. Averages make the math work. Averages produce a plan a client can hold, with a number at the end of it. Telling someone in their sixties that they may need to fund forty more years of living is not a comfortable meeting.
But clients already sense that something is off. They sit across the table nodding while a voice in the back of their head asks what happens if the assumptions are wrong. That voice is right. The odds that any single-point lifespan assumption is correct are close to zero.
When you name that uncertainty first, you take it off the client’s shoulders. You stop selling precision you cannot deliver, and you start offering something better, a plan that holds up across a range of futures rather than one that only works if the client dies on schedule.
The advisors who make this shift will build a different kind of relationship. Not one resting on a projection that both sides privately doubt. One resting on an honest accounting of what nobody knows, and a structure designed to survive it.
Living longer is the achievement. Unprepared longevity is the problem. And preparing for it starts by admitting that the average client does not exist.
Related: 65 Was Never Designed for the Retirement We Have Today