Planning for a long life and rising prices

Average life expectancy describes a population, not you. For a married couple, the chance that at least one spouse lives well into their nineties is meaningful. Planning to an average age means roughly half of people outlive the plan.

Owners who sell early may face an especially long horizon, which raises the stakes on spending decisions made in the first few years.

If prices rise steadily, a fixed annual income buys less every year. Over two or three decades, the cumulative effect can be large. Healthcare and long-term care costs have historically risen at different rates than general prices, so a single inflation figure may understate pressure on some budgets.

Assets held entirely in cash or short-term instruments may feel safe from market swings but are exposed to this slow loss of purchasing power.

Common responses include holding some growth-oriented assets, Treasury Inflation-Protected Securities, delaying Social Security to increase an inflation-adjusted benefit, and in some cases income annuities. Each has costs, tradeoffs, and risks. Annuities in particular vary widely in fees, surrender charges, and how much inflation protection they offer, if any.

Extended care needs can strain any plan. Options range from self-funding to traditional long-term care insurance to hybrid life or annuity products with care riders. Each carries premiums, benefit limits, and underwriting. This is an area for a licensed professional to explain in detail.