Why Expats Consistently Underestimate How Long Retirement Really Lasts

One of the least discussed risks in expat retirement planning is not market performance, tax, or even inflation.

It is time.

After years advising expats before, during, and well into retirement, I have learned that the most common planning failure is not reckless spending or poor investment choice. It is a fundamental underestimation of how long retirement actually lasts and of what that duration quietly does to even well-intentioned plans.

For many expats, this only becomes clear when changing course is no longer straightforward.

The uncomfortable reality most plans fail to acknowledge

A couple retiring at 60 today has a very high probability that at least one of them will still be alive at 90. And that probability only goes up over time.

That is at least a 30-year income problem, not a retirement pot problem.

Yet most people still carry an outdated mental model of retirement, one that assumes a relatively short final chapter, a gradual slowdown, and steadily falling costs. That model no longer reflects reality, particularly for expats who retire earlier, remain active longer, and often live internationally, where medical care may need to be paid for privately, for example, in the United Arab Emirates (UAE).

A retirement starting in the late fifties or early sixties can easily span three decades. That is not a wind-down phase. It is an entire second adult life, with changing priorities, costs, and risks along the way.

Plans built on shorter assumptions struggle under that weight.

Why expats are especially exposed to longevity risk

Retirement planning for expats is inherently more complex than domestic planning, even before longevity is taken into account.

Future residency is often undecided. Healthcare costs vary dramatically by country. The tax treatment of pensions and investments can vary significantly depending on the source of income. Currency exposure matters far more when income is fixed rather than earned.

Over the years, I have seen many expats excel at accumulating capital, while giving far less thought to how that capital will be drawn down, taxed, and sustained over decades across different jurisdictions.

The risk is rarely running out of money early. The real risk is the loss of flexibility and financial independence later.

Longevity magnifies every weakness in a plan. Small inefficiencies that feel irrelevant over five or ten years become meaningful over twenty or thirty.

A pattern I have seen repeat itself

I have lost count of how many times I have seen the same story.

An expat retires with a healthy portfolio and has made their own calculations on how much income can be sustained. Confidence is high, markets have been kind in recent years, and income initially feels comfortable. The plan assumes steady returns, predictable spending, and limited change.

Ten or fifteen years later, life looks different. Inflation increased. Healthcare costs rise. Tax rules change. Currency moves reduce purchasing power. Their spending was higher than expected due to years of living in the Middle East, living without limits. At that point, the room for manoeuvre is much smaller.

Nothing went “wrong”. The plan simply underestimated time.

That is the quiet danger of longevity risk.

Retirement is not one phase; it is several

One of the most valuable shifts in expat retirement planning is to stop treating retirement as a single, flat period.

In practice, retirement usually unfolds in distinct stages.

There is often an early phase marked by higher spending, travel, hobbies, and family support, which is frequently the most expensive period of retirement, despite many plans assuming costs immediately drop.

This is followed by a more stable middle phase, in which spending may level off but inflation becomes more pronounced, and healthcare costs begin to rise.

Later, priorities often change again. Flexibility, care, and simplicity matter more than growth. The ability to access capital efficiently and tax-sensitively becomes critical.

Plans that assume a straight line struggle to adapt. Robust plans anticipate these transitions and are structured to cope with them.

Why traditional annuity-based pensions struggle in a modern retirement

This evolving, modern, multi-phase reality of retirement is precisely why many traditional UK pension structures no longer align with how people actually live.

Older UK pensions were designed around a very different assumption: that retirement was short, largely predictable, and best served by converting capital into a fixed, guaranteed income through an annuity. That model prioritised certainty over flexibility, and at the time, it made sense.

In a modern expat retirement, it often does not.

An annuity locks in income levels at a single point in time, typically at or near retirement, based on prevailing interest rates and life expectancy assumptions at that time.

Once set, it cannot adapt to changing spending patterns, unexpected healthcare costs, evolving residency, or shifts in tax treatment. Inflation protection, when available, is often expensive and remains imperfect over long retirement horizons.

For expats whose retirement may span multiple countries, currencies, and tax regimes over several decades, this rigidity can become a significant limitation rather than a benefit.

The issue is not that guaranteed income is inherently bad. The issue is that guaranteed income on inflexible terms rarely aligns with a retirement that has distinct stages, changing priorities, and increasing uncertainty over time.

Modern retirement income planning tends to focus less on converting everything into certainty on day one and more on preserving flexibility, intelligently sequencing income sources, and retaining control so that decisions can adapt as life unfolds.

This is why many expats discover, often too late, that a pension structure that looked sensible on paper no longer aligns with how they actually want or need to live in retirement.

Understanding whether your pension benefits provide flexibility, control, and adaptability over a long retirement is as important as assessing how well the investments have performed.

That distinction becomes increasingly important the longer retirement lasts.

Why strong markets can create false confidence

Periods of strong investment performance often reinforce optimistic assumptions.

When portfolios grow well during accumulation, it becomes tempting to extrapolate that experience into retirement. But drawdown is a very different environment.

Withdrawals interact with returns. Inflation erodes purchasing power. Tax becomes more visible. Behaviour matters more than most people expect.

I have seen retirees with sizeable portfolios realise, years into retirement, that their income strategy was too aggressive, in the wrong currency, or too rigid once real life intervened.

Longevity does not forgive optimistic assumptions.

A simple test of whether your plan accounts for time

If you want to assess whether your current expat retirement planning genuinely reflects longevity risk, consider these questions carefully:

• At what age does my plan assume spending meaningfully reduces, and is that realistic

• Which assets are intended to support me in my seventies and eighties, not just early retirement

• How sensitive is my plan to a prolonged period of lower-than-expected returns

• How would my income change if I retired earlier, later, or in a different country

• Do I understand how tax and currency exposure evolve over decades, not just at retirement

If those questions are difficult to answer clearly, it does not mean you are unprepared. It simply means your planning has not yet been stress-tested against time.

What experienced expat retirement planning actually prioritises

With experience, the focus of retirement planning shifts away from chasing returns and towards managing sustainability and control.

This means understanding:

• How income can be drawn without forcing sales at the wrong time

• How assets should be sequenced across different retirement phases

• How tax efficiency changes with residency and legislation

• How currency exposure affects long-term purchasing power

• How flexibility is preserved as circumstances evolve

The strongest plans are not those that assume the future can be predicted accurately. They are the ones that allow for error, change, and adaptation without panic.

A considered closing thought

If you are still earning well and retirement feels distant, it is easy to assume there will be ample time to refine matters later.

In reality, the most effective expat retirement plans are built when options are widest, income is strong, and decisions are easiest to change.

If you are not entirely confident that your current planning fully reflects how long retirement may last, and how complex it can become across different countries, tax systems, and life stages, that uncertainty is not a weakness.

It is simply a signal that your assumptions would benefit from being stress-tested.

Sometimes the most valuable next step is not more reading or better spreadsheets, but a structured conversation with someone who has seen how these plans actually play out over decades.

Start with a conversation. Book a discovery call with My Intelligent Investor and get clear on where you stand, what’s changing, and what you can do about it. Let’s build a strategy that turns market complexity into opportunity.

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