Health Portfolios Are the Last Retirement Input Advisors Miss

Retirement planners have solid models for withdrawal rates, market sequencing, and tax brackets; the variable with the most leverage, whether a client will still be mobile, sharp, and independent at 85, rarely makes it into the same spreadsheet.

Joseph Coughlin, director of the Massachusetts Institute of Technology's AgeLab, wants to put it there, and a paper he wrote for October publication in the Retirement Management Journal argues that physical inactivity is a modifiable financial risk, not a personal preference. Financial Planning reported the paper's argument and spoke with Coughlin about how to raise the topic without making a client retreat.

The framework is a "health portfolio" with three components. Preventive measures cover the habits that matter decades out, including screenings, nutrition, and sleep; performance work keeps the body fit today through gym memberships, classes, and training routines; protective spending hedges the financial plan against a serious late-life illness through the insurance and long-term-care decisions that already show up in an advisor's file. The paper's contribution is treating those three components as one managed position.

Clients may be surprised to learn they already fund this portfolio every month. A client who squirms at a question about retirement health may still hold a gym membership, pay for fitness classes, or buy supplements; Coughlin's suggested exercise is blunt and practical: list the monthly health spending, sort each item into preventive, performance, or protective, and the page begins to look like an asset allocation, scattered habits turned into a strategy.

Pitching the conversation is the delicate part. Coughlin told Financial Planning that an invitation to "talk about your health" gets a cross-eyed look, so his alternative is fact questioning: do you belong to a gym, do you schedule preventive screenings, do you track your sleep? Those are the same kind of intake questions an advisor asks about income, insurance, and estate documents.

The health portfolio is a retirement-income story with good timing. Longer lifespans mean retirements last much longer, and this publication has argued that the last mile of retirement, the shift from saving to spending, is where advisory relationships are won and lost. Coughlin's distinction between longevity and "health span" sharpens that argument: longevity is the calendar, while health span is the number of years clients can actually live well, and preventive investment, in his framing, is an attempt to stretch the health span, not merely the life span.

Planners now compete on sophistication, from tax sequencing and Roth conversion timing to long-term-care design, and the health portfolio connects that technical work to the one asset clients cannot outsource. Firms that fold a health review into the annual meeting will have a conversation most competitors are not; firms that wait for the client to raise it risk meeting the topic in an early retirement, a fall that drains savings, or a diagnosis that changes every assumption in the plan. The advisor does not need to become a clinician; asking about the gym is within their lane, and the October Retirement Management Journal paper gives them the opening to ask this quarter.