Assumptions regarding how long you and your spouse, if you have one, plan to survive in retirement are central to determining your funded status. These assumptions — your lifetime planning period assumptions (LPPs) — define the horizon over which assets must support spending. The Actuarial Financial Planner (AFP) model on our website includes default LPPs based on the ages entered and planning horizons from the 2022 Actuaries Longevity Illustrator, using the 25% chance‑of‑survival metric for non‑smokers in excellent health.
In our January 20, 2026 Advisor Perspectives article and our January 24, 2026 post, we encouraged readers to develop more personalized LPPs using a three‑step process. This process uses results from various life‑expectancy calculators to estimate an age adjustment reflecting your specific health and habits (your “biological age” vs. your chronological age) and then applies the Longevity Illustrator’s 25% survival horizon for that adjusted age. Inputting these personalized LPPs into the AFP generally requires using the override process described in the workbook. It is important to follow this override process rather than simply changing the LPP in column H of the spreadsheet.
Why LPPs Should Be Updated Regularly
A natural question is: How frequently should you change your LPP assumptions? We recommend updating them at least once a year as part of your regular valuation cycle. While LPPs will often decrease by one year as you age, they do not always move linearly. Annual updates help ensure that your funded status reflects:
- The alignment of chronological age and biological age
- Changes in personal health, habits, or functional status
- Mortality improvement embedded in population tables
- The evolving financial needs of both spouses
Without periodic recalibration, funded‑status measures can drift away from reality, reducing their usefulness for planning.
When More Significant Adjustments Are Needed
In addition to annual updates, certain events warrant a more substantial revision of your LPPs. Each year, we encourage you to repeat the three‑step biological‑age process. But if you or your spouse experience a meaningful change in health or habits, a larger adjustment may be appropriate.
Examples include:
- A cardiac event or stroke
- A cancer diagnosis
- A mobility‑limiting condition
- A significant decline in functional capacity
- A major change in habits (e.g., quitting smoking, substantial weight loss, or conversely, adopting less healthy behaviors)
These events can shift biological age by several years, and therefore may reduce (or occasionally increase) the appropriate LPP by more than the usual one‑year decrement.
When one spouse experiences a negative health event, additional planning may be required for the other spouse. A shortened LPP for one member of the couple may imply:
- Earlier survivor‑spending recalibration
- Increased near‑term medical or caregiving expenses
- Revised long‑term‑care contingencies
- Adjustments to survivor Social Security timing or benefit expectations
These considerations highlight why LPPs should be treated as dynamic assumptions rather than static parameters.
Summary
- LPPs are a foundational input to funded‑status calculations and should be updated at least annually.
- Use the three‑step biological‑age process each year to maintain alignment between personal health and planning horizons.
- Significant health or habit changes may require larger, non‑linear adjustments to LPPs.
- When one spouse experiences a negative health event, revisit both spouses’ LPPs and consider the broader financial and caregiving implications.
- Always use the AFP override process to ensure updated LPPs flow correctly through the model.
