A significant percentage of older Americans underestimate how long their retirement will last—how long they will live.

Most people think the average American Live from 75 to 80 years old. It’s a little-known fact that life expectancy increases with age. American man he is 60 and he is expected to reach 82. Female, 85 years old.

That knowledge is called longevity literacy, but many of us don’t have it.and 2022 Survey by A quarter of Americans underestimate life expectancy at age 60, according to insurer TIAA. A further 28% said they did not know.

Even among baby boomers, whose youngest is approaching 60, more than two-fifths of survey respondents expect longevity to be low or miss the point.

“I was a bit shocked when I got the data,” said Surya Koruri, director of the TIAA Institute who produced the report.

Coruri said he was particularly disappointed that the majority of respondents were unable to answer the multiple-choice questions about longevity.

“We gave them the answer, but they still said, ‘Oh, I don’t know,'” he says.

The turmoil surrounding the human lifespan has made it difficult to plan for retirement, a stage in life for which many Americans are already ill-prepared.

More than two-fifths of baby boomers no retirement savingsEven as the post-war generation approaches retirement, the census data show.

The average ownership rate for Boomer households is $134,000 in retirement savings In 2019, according to NerdWallet analysis.

From most perspectives, even that number isn’t enough. Human life expectancy does not stop at age 60. Americans retiring at 65 Expected to live to age 85according to Social Security projections.

“We don’t know why people are so wrong,” said Gal Wetstein, a senior research economist at Boston University. “I think there’s some evidence that people don’t consider the fact that they’re already living to a certain age when they try to guess their life expectancy.”

Citing research from the school’s Retirement Research Center, Wetstein said the biggest financial risk retirees face is “living beyond savings.”

That fact is also forgotten by many Americans. Wetstein said those approaching his retirement mistakenly assume that stock market volatility is their biggest financial danger. In fact, the much bigger risk is “living until the money runs out”.

Extending life expectancy is one of the great advances of humankind over the past century. American born in 1900 expected to reach 47. By 1950, life expectancy had increased to 68 years. Life expectancy in the United States peaked at 79 years in 2019, but has since declined due to the COVID-19 pandemic.

The longevity bonus has become more pronounced over time as we survive the various hazards that killed our ancestors and live longer.Researchers at Stanford University studied people living over the age of 65 in developed countries and found that humans live longer. 3 years for each generation.

But such nuances are lost to many outside the scholarly community.

Researchers at the Institute for Employee Benefits have repeatedly surveyed Americans of all ages about longevity and found it consistently baffling.

“One thing that’s consistent is that 20 percent don’t know or can’t answer,” said Craig Copeland, director of the Institute’s wealth and well-being research. “That means one-fifth of people will start without a life sentence.”

Retirees did somewhat better on survey questions about longevity. Copeland said more than half of retirees in 2022 have demonstrated knowledge that 65-year-old Americans can expect to live another 20 years. But even in this group, her one-fifth of respondents did not answer the question.

Researchers at Boston University found that many working-age Americans are “pessimistic about their life expectancy” and underestimate their life expectancy, Wetstein said.

Even people in their 50s and 60s “tend to think they can’t live very long, or as long as the average life expectancy of people their age,” he said. “Such a reversal happens in the 70s, which is too late to make a decision about retirement.”

Women show much better longevity literacy than men. In the TIAA survey, 43% of women answered the longevity question correctly, compared with 32% of men.

“That’s a concern to me because it means they’re taking the risk of living longer, and they’re going to live longer than they have money,” Corli said of the male respondents. Stated.

According to Corli, people with higher human longevity literacy are more likely to save for retirement. It’s also more likely that you’re calculating how much money you’ll need. And they are more likely to be satisfied in retirement.

Lack of longevity literacy leaves many Americans unprepared for retirement. There are other factors as well.

Millions of Americans rely on Social Security until retirement.However, the average monthly Social Security check for retired workers is about $1,800That’s far less than a typical family would spend in retirement.

Earlier generations of retirees took advantage of employer-funded pensions. That source of income has gradually been replaced by employer-sponsored retirement plans.

However, according to AARP analysis, almost half of Americans Inability to access retirement plans In the workplace, especially in smaller companies with fewer employees.

Even workers who save for retirement often don’t save enough. In the most recent Retirement Confidence Survey by the Institute for Employee Benefits, only 64 percent of workers said they were confident in their retirement. have enough money For a comfortable retirement.

Another measure is Boston University’s National Retirement Risk Indexfound that about half of working-age American households are at risk of not being financially prepared for retirement.

Equally alarming, perhaps only about a third of households perceive that they are not prepared.

Many families overestimate and underestimate the money they will have in retirement how long do you need. Homeowners often focus too much on the appreciation of their homes and little on the amount of their mortgage debt. Workers with retirement accounts may underestimate how much money they can spend. A $100,000 retirement nest egg translates to only about $600 in monthly retirement income. Too often, even though there are two salary earners in the household, only one partner is actively saving for retirement, researchers say.

Living longer beyond retirement savings is just the biggest of several risks Americans face in retirement. Another is to cover the cost of long-term care.

More than half of Americans retiring today say they will eventuallyLong-term service and support’”, according to a federal study, the average cost is $120,900.

“A semi-private room in a nursing home costs about $100,000 a year, and that’s a lot,” Wetstein said. “Undoubtedly, for many, it will quickly deplete their savings.”

A recent analysis by the National Council on Aging found that 80% of people over the age of 60 have lack of resources To cover long-term care.

“There’s a notion that Medicare will cover some of these costs, but in reality Medicare generally doesn’t cover most of those costs,” said the economic and financial security director of the National Council on Aging. Genevieve Waterman said.

Worried about funding for retirement? The National Council on Senior Citizens suggests: age well plannerfeatured on many investment sites. retirement income calculator.

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