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June 14, 2026
The Dispatch

Definition

Longevity Risk

Longevity risk is the risk of outliving your savings — that you live longer than your retirement corpus was designed to support.

As lifespans lengthen, a retirement that must fund 30 or more years is increasingly common, and underestimating how long you will live can leave you short late in life when earning is no longer possible. Planning to a conservative, longer lifespan rather than an average one builds in safety.

Tools to manage longevity risk include annuities (which pay for life and pool the risk across many people), keeping some equity exposure in retirement to outpace inflation over decades, and a cautious withdrawal rate. In India, where family support is changing and pensions are limited, planning for a long life is increasingly important.

Related terms

  • Retirement CorpusA retirement corpus is the total lump sum you need to have accumulated by retirement to fund your living expenses for the rest of your life.
  • Safe Withdrawal RateThe safe withdrawal rate is the percentage of your retirement corpus you can take out each year with a low risk of running out of money over your expected lifespan.
  • AnnuityAn annuity is a financial product that pays a regular income stream, typically for life, in exchange for a lump sum — used mainly to secure income in retirement.

Plain-English explainer from The Dispatch Investors Encyclopedia. General information, not financial advice.