You may be planning for the wrong decade
Somewhere around 55, something strange happens to otherwise sensible investors. Having spent three decades patiently accumulating, they start behaving as if the finish line were in sight – trimming equities, building cash, scanning the horizon for the next crash. The time horizon, they reason, is shortening.
It isn’t. It may be the longest it has ever been.
A healthy couple retiring at 65 today has, on commonly used mortality tables, roughly a one-in-three chance that at least one of them is still alive at 95 – and Switzerland sits in the world’s top five for life expectancy, so the odds here are at the generous end. That is a thirty-year investment horizon, entered with no salary to top it up. Not a wind-down. A career-length commitment.
Add to this the research of Hendrik Bessembinder, professor of finance at Arizona State University. Studying US stocks from 1926 to 2016, he found that just 4% of listed companies accounted for all the net wealth the market created. The other 96%, collectively, did no better than US Treasury bills.
His update to 2022 found that more than half of all US stocks actually lost shareholders money over their lifetime. The lesson is that returns are concentrated in a few names nobody can reliably identify in advance. A concentrated portfolio isn’t a sharper bet; it’s a bet that you happen to own the few winners. Diversification is how you make sure you do.
Jack Bogle, founder of the ETF pioneer Vanguard, had a simple quote when investing, – “don’t look for the needle, buy the haystack“. Diversification is not a defensive tactic – it is the only strategy that guarantees you own the winners, whichever companies, sectors or countries they turn out to be over the next three decades.
The real risk at 60 is not the next bear market. It is treating a marathon as if the finish line were next year.
What We’re Watching
The Swiss numbers keep moving. A 65-year-old man in Switzerland can now expect to live roughly another 20 years, a woman a further 22, and those are averages, which means half will live longer. Life expectancy here ranks in the world’s top five and continues to edge upward.
Yet much of the planning industry still treats ‘life expectancy’ as a finish line. Plan to the average and you have, by construction, a coin-flip chance of outliving your own plan. The average is not a target; it is the halfway mark.
Actuaries also note that each retiring cohort arrives with better survival odds than the one before it. The couple retiring in 2036 should expect an even longer horizon than the couple retiring today. Longevity is a trend, not a snapshot.
The Expat Angle
For internationally mobile professionals, the horizon problem doesn’t shrink – it multiplies:
Retiring in Switzerland means retiring in the world’s longevity capital. A thirty-year retirement here will often span more than one country, more than one currency and more than one tax system. De-risking into cash doesn’t remove risk – it just chooses which currency to lose purchasing power in. At even 2% inflation, cash halves in real terms over 35 years.
The pension stack makes the point concrete. In Switzerland a typical expat might retire with two or more state pensions (including Swiss), a Swiss Pillar 2, and investment accounts across borders – each paying in its own currency, each with its own inflation adjustment, each governed by rules they cannot control. The portfolio is the one part of the stack they do control, and it is the only part with a credible claim to keeping pace with 30 years of rising prices.
So the question at 65 is not ‘how much risk can I still afford?’. It is ‘which of my assets has to survive to 95 – and what is the asset class with the best track record of achieving that?’.
One number
One in three
The rough odds, on commonly used mortality tables, that at least one member of a healthy 65-year-old couple will still be alive at age 95.
A one-in-three event is not a tail risk. It is a planning requirement. Thirty years of retirement is somebody’s base case – the only question is whether the money was invested for the person who gets them.
The question remains, if the rules of your Swiss pension were rewritten in 2035, would you know whether you were a winner, a loser, or the one quietly paying for both?
Longevity is the risk nobody complains about until the money runs out first. So the question worth considering this week: if you knew today that you or your partner would reach 95, what would you change about how your money is invested – and what, honestly, is stopping you from changing it now?
Discover more
Blackden Financial is a long-established, FINMA-licensed Swiss wealth manager, specialising in advising internationally mobile expatriate clients with complex cross-border affairs. We are entirely independent and fee-only – no commissions, no retrocessions.
If it feels like the right time to review how you manage your wealth in a changing world, book a no-obligation discovery call. Contact us on +41 22 755 0800, email info@blackdenfinancial.com, or complete our contact form.
A member of our team will get back to you to arrange a time to talk through your situation, and, step by step, how best to proceed.