Smashing Retirement Anxiety with Longevity Modelling
Professional Planner recently highlighted a growing challenge for retirees and their advisers: the “fear of running out” (FORO). Unlike the well-known “fear of missing out,” FORO strikes at a far more serious anxiety. It leaves retirees reluctant to spend their hard-earned superannuation, even when their financial position is more than sufficient to support the lifestyle they want.
As the article noted, retirees are underspending by as much as 17 per cent relative to what’s considered optimal, and the result is enormous pools of unspent capital. Inheritance from super is often unintentional; it’s the by-product of retirees being too afraid to draw on what they have. The irony is that FORO is greatest at the very moment when people are healthiest, most energetic, and most eager to enjoy their retirement.
For advisers, the message is clear: helping clients live with confidence in retirement isn’t just about investment performance. It’s about education, modelling, and reassurance, and giving people clarity on how long their savings will last, and what adjustments can ensure they achieve the lifestyle they’ve imagined.
The article makes an important point: FORO is irrational, but that doesn’t make it any less real. Even in periods of strong superannuation performance, retirees cut back spending out of fear. Government policy has reinforced the anxiety by lowering minimum drawdown rates during crises like the GFC and COVID, subtly telling people to “save more, spend less.”
This has created a distorted mindset: people think of super as a water tank that must remain full, living only off the “overflow.” For most Australians, that’s inefficient and unnecessary. Retirement savings are designed to be drawn down steadily over a lifetime, not hoarded in fear of what might come.
The challenge for advisers is to help clients unlearn these ingrained habits. And that requires more than reassurance in a meeting. It requires detailed, personalised financial modelling.
How Longevity Modelling Adds Clarity
This is where paraplanning support plays a pivotal role. At MutualPlans, our outsourced paraplanners specialise in producing detailed longevity financial models that project how long a client’s savings will last—taking into account future lifestyle goals, potential health costs, and possible changes in spending patterns.
This level of modelling does two things. First, it gives clients clarity. They can see in black and white whether their desired lifestyle is sustainable. Second, it creates space for meaningful discussions around trade-offs. If a client’s goals don’t align with their assets, advisers can model alternatives: delaying a trip, downsizing earlier, or adjusting drawdown rates.
Once clients see the numbers, fear starts to dissolve. The unknown is what fuels FORO. Replace it with evidence-based projections, and retirees are empowered to live the life they want rather than one constrained by anxiety.
FORO isn’t something that vanishes overnight. It needs to be managed over the course of retirement. That’s why the annual review is such a crucial service touchpoint for advisers.
By including a financial projection in each annual review, advisers can check whether clients remain on track, or whether adjustments are needed. For some, it might be a reassuring confirmation that nothing has changed. For others, it may prompt small tweaks that prevent bigger issues later.
For advisers, the ability to deliver these projections consistently and at scale is a key differentiator. It transforms the annual review from a compliance exercise into a genuine value-adding service that deepens client trust.
MutualPlans supports this by giving advisers access to scalable paraplanning resources. Instead of overwhelming in-house teams with time-intensive modelling, advisers can outsource the work and receive accurate, compliant, client-ready projections on demand.
Turning Fear into Confidence
The Professional Planner piece makes a compelling case: retirement confidence doesn’t come from saving more or spending less. It comes from knowing. When retirees understand the real longevity of their savings, they not only spend more freely on themselves, but also feel more comfortable supporting children and grandchildren.
That confidence is transformative. Clients who once feared destitution begin to embrace experiences, travel, and giving back. And advisers, by providing the clarity to unlock that confidence, become indispensable partners in their clients’ lives.
For advice practices, there’s also a commercial benefit. Confident clients are engaged clients. They’re more likely to stick with their adviser, recommend them to others, and see ongoing value in review services. In an industry where trust and retention are everything, reducing FORO is not just good client care; it’s smart business strategy.
Delivering this kind of detailed, personalised modelling across an entire client base is not easy. It requires hours of work, meticulous compliance, and constant updating as regulations, markets, and client goals evolve. For many firms, the bottleneck is capacity.
This is where outsourced paraplanning proves its value. By partnering with specialists like MutualPlans, advisers gain the ability to provide robust longevity modelling and annual projections at scale. It ensures every client—pre-retiree or retiree—receives the confidence-building clarity they deserve, without overwhelming internal teams.
Ultimately, tackling FORO isn’t just about changing mindsets. It’s about equipping advisers with the tools, resources, and support they need to deliver clarity at scale.