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January 13, 2022 | Yet Another Retirement Risk You May Not Be Considering

John Rubino is a former Wall Street financial analyst and author or co-author of five books, including The Money Bubble: What to Do Before It Pops and Clean Money: Picking Winners in the Green-Tech Boom. He founded the popular financial website in 2004, sold it in 2022, and now publishes John Rubino’s Substack newsletter.

The most common retirement plan involves making some reasonable investment-return assumptions and then structuring your annual spending to run your nest egg down to zero at age 90 or thereabouts. Ideally, you spend your last dollar on the day you take your last breath.

This works, at least in general terms, because relatively few people live into their 90s. But — in a world where everything else is changing — how solid is that lifespan assumption, and how would its extension affect the typical retirement plan? Consider the mixed feelings of an 85-year-old (and his or her family) if a pill comes along that adds an extra 20 years to life expectancy — without adding a commensurate amount to the recipient’s net worth. In return for those extra years, our hypothetical retiree has morphed from “sunset of a well-planned life” to “massive long-term burden on family and/or taxpayers”.

That’s not how most people want to go out, but it could indeed happen, according to last week’s Wall Street Journal:

Can You Fight Aging? Scientists Are Testing Drugs to Help 

Will people eventually routinely live—and live healthily—longer? That’s the vision of the burgeoning field of aging research, where scientists are trying to extrapolate tantalizing life-prolonging findings from animal experiments into medicines that slow, prevent or even reverse the aging process for humans.

Leading candidates for stanching aging include two familiar drugs—metformin, a front-line diabetes treatment, and rapamycin, long used to prevent transplant patients from rejecting donated organs. Both have been shown to increase longevity in animal studies and both target molecular processes linked to the aging of cells.

Another approach is a new class of drugs called senolytics, which clear the body of so-called senescent cells, old cells that stop dividing but don’t die. They accumulate in tissues throughout the body and secrete factors that damage other cells. They are linked to such aging conditions as frailty, cognitive impairment and lack of physical resilience.

Also in the mix is a strategy called cellular reprogramming in which scientists are seeking to turn back the clock on aging cells, restoring functions characteristic of younger cells.

A magic pill that “makes life expectancy jump from 80 years to 150” isn’t likely, says Steven Austad, senior scientific director of the nonprofit American Federation for Aging Research in New York and chair of the biology department at University of Alabama at Birmingham. But a 10% to 20% increase in lifespan beyond the current roughly 80-year average in the U.S. for men and women “is quite conceivable,” he says.

Academic research centers and biotechnology companies are piling into the antiaging field in pursuit of the longevity dream. They are backed in part by a $3 billion annual budget for the U.S. National Institute of Aging as well as some high-profile billionaires and other venture capital investors.

We clearly need to add “outliving our savings” to the ever-lengthening list of future risks. But dealing with this one is fairly straightforward mathematically. Just bump up the target age where you zero out your savings, to 100 or maybe 110. Plan on spending less in each retirement year, working longer before retiring, and — most important — saving like crazy along the way (gold bugs, that means turbocharge your stacking).

The new goal: Enough cash on hand for a couple of extra decades to be a blessing, not a curse.

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January 13th, 2022

Posted In: John Rubino Substack

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