The Hardest Thing to Plan For in Retirement

Planning for retirement is challenging in just about every aspect, from saving enough to investing well and controlling spending. But one challenge stands out as being the hardest to address: the uncertainty of how long you'll live.

In the following video, Dan Caplinger, The Motley Fool's director of investment planning, looks at the question of life expectancy and how to plan for it. Dan notes that essentially, unknown life expectancy forces you to plan for all contingencies, inevitably making it impossible to match up spending and saving perfectly. Dan notes that immediate annuities can help you eliminate some of the risk of outliving your money, with AIG (NYSE: AIG  ) , Prudential (NYSE: PRU  ) , and MetLife (NYSE: MET  ) among the top sellers of products that guarantee lifetime income. But Dan also discusses the challenges of using those products, which can often be hard to understand and laden with fees. Dan concludes that while there's no easy solution, being aware of the problem of longevity risk can help you take early action if you start to run out of money in retirement.

The best way to plan for retirement
The other way to ensure a more secure retirement is to make your savings work harder for you. To do that, your best investment strategy is to buy shares in solid businesses and keep them for the long term. In the special free report "3 Stocks That Will Help You Retire Rich," The Motley Fool shares investment ideas and strategies that could help you build wealth for years to come. Click here to grab your free copy today.

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Dan Caplinger

Dan Caplinger has been a contract writer for the Motley Fool since 2006. As the Fool's Director of Investment Planning, Dan oversees much of the personal-finance and investment-planning content published daily on With a background as an estate-planning attorney and independent financial consultant, Dan's articles are based on more than 20 years of experience from all angles of the financial world.

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