---

For decades, retirement planning has largely revolved around a seemingly straightforward question: Will your money last as long as you do?

A new white paper from aging-care technology company bQuest argues that question may no longer be enough.

The report, titled “Retirement Planning Is Broken: Why Longer Lives Require the Next Evolution of Financial Advice,” says conventional financial planning was designed for a version of retirement that doesn’t reflect how long many Americans now live — or the complicated health, housing, and caregiving decisions they may encounter along the way. 

The result, according to bQuest, is two very different risks for retirees.

On one side are people who may have accumulated enough money to comfortably enjoy retirement but remain afraid to spend it. On the other are retirees whose plans may not adequately account for unpredictable health and long-term care expenses that can quickly change a family’s financial situation.

---

Retirees may be saving too much — and planning for too little

One of the more counterintuitive problems highlighted in the report is what former Halbert Hargrove CEO Russ Hill calls the “consumption paradox.”

Some retirees ultimately die with more money than they had when they retired, the report says. This isn’t necessarily because that was their goal, but because the fear of running out of money kept them from spending their savings. 

That illustrates a limitation of retirement projections based primarily on investment returns, withdrawal rates, and probabilities of financial success.

Knowing that a financial model gives someone a high probability of not exhausting their savings doesn’t necessarily tell that person how much they can comfortably spend on travel, family, gifts, or other priorities.

At the same time, the report argues that conventional planning can underestimate a very different financial threat: the messy and often unpredictable costs associated with aging.

A serious diagnosis, hospitalization, or need for long-term care can create expenses and decisions that don’t fit neatly into a traditional retirement forecast.

Tom West, a long-term care planning specialist at SEIA who was interviewed for the paper, described cases in which even wealthy families lacked a coordinated plan for care. In one example cited by bQuest, a household worth $25 million didn’t have a single person who understood the family’s complete care plan.

---

What is ‘longevity planning’?

Instead of focusing solely on whether a retiree’s savings will last, bQuest proposes what it calls “longevity planning.”

The idea is to incorporate issues such as health and care needs, housing, cognitive decline, family preparedness, and estate considerations into financial planning before a crisis occurs. 

That could mean discussing where someone expects to live as they age, who could help make financial or health decisions if cognitive problems develop, what caregiving resources are available, and how potential care expenses could affect the rest of the financial plan.

The report also distinguishes long-term planning from what it calls “care coordination” — assistance that becomes necessary when something actually happens, such as a hospitalization, diagnosis, or sudden caregiving problem. 

For consumers, the distinction is important. Preparing financially for the possibility of long-term care isn’t necessarily the same thing as having a practical plan for finding and coordinating that care when it’s needed.

---

Advisors could face a rapidly growing challenge

Demographics are making those questions increasingly difficult to ignore.

By 2030, all members of the Baby Boomer generation will be at least 65, and roughly one in five Americans will be at retirement age, according to figures cited in the report. 

bQuest argues that the financial planning industry has become highly sophisticated at helping consumers accumulate and preserve wealth but hasn’t evolved as far in helping people decide how to use that wealth during potentially decades-long retirements.

The company has a commercial interest in that argument: bQuest operates an aging-care and end-of-life planning platform for financial advisors, including access to care resources and specialists. 

However, the report raises a useful question for consumers approaching retirement: A plan may show that your portfolio can survive 20 or 30 years, but does it explain how you’ll handle the life changes that could occur during those years?

For people choosing or working with a financial advisor, that could mean looking beyond questions about investment returns and withdrawal rates.

It may also be worth asking how the advisor plans for long-term care, housing changes, cognitive decline, and family caregiving — and who you’ll call when one of those possibilities becomes reality.