More Than Half of U.S. Adults Are ‘Jeopardizing’ Retirement Preparedness With Poor Life Expectancy Knowledge, Report Says

Romantic senior woman smiling at the camera while embracing her husband by the ocean.
jacoblund / Getty Images/iStockphoto

One of the keys to a comfortable retirement is building enough wealth to ensure you don’t run out of money while you’re still alive. This requires familiarity with average life expectancies, but not enough Americans have this kind of “longevity literacy.”

Social Security: Women Get $354 Per Month Less Than Men — Here’s Why
See: With a Recession Looming, Make These 3 Retirement Moves To Stay On Track
Find: What Is the Average Social Security Benefit at Age 62?

More than half (53%) of U.S. adults are “working with inaccurate information” in terms of life expectancy, according to a new report from the TIAA Institute and George Washington University. The result is that many Americans could “jeopardize their retirement preparedness,” the report said.

Survey respondents were given four options to test their knowledge of life expectancy rates in the United States once someone reaches age 60, broken down between males and females. According to the Social Security Administration, men on average live another 22 years when they reach age 60, while women live another 25 years.

But fewer than four in 10 (37%) respondents in the TIAA-GWU survey answered correctly, demonstrating “strong longevity knowledge.” More than one-quarter (28%) responded “don’t know” and are considered to have “poor longevity knowledge.” Another 25% chose the response that underestimates life expectancy for a 60-year-old, while 10% chose the response that overestimates life expectancy.

Retire Comfortably

“These findings are significant given that many Americans face the prospect of financial insecurity in retirement,” the report said. “The challenge is that longevity literacy, like financial literacy, tends to be low among U.S. adults.”

Among the other key findings cited in the report, based on a 2021 Survey of Household Economics and Decision-making, include the following:

  • One-fourth of non-retired adults have no retirement savings.
  • Only 40% of non-retirees think their retirement savings are on track.
  • Among non-retirees age 60 and older, 13% have no retirement savings, while 48% don’t think their retirement savings are on track. Among those age 45-59, the percentages are 16% and 55%, respectively.
  • Nearly 60% of non-retirees with retirement saving accounts report low levels of comfort in making investment decisions with their savings.

More recent data from the TIAA-GWU study found that 32% of workers don’t save for retirement on a regular basis, and only 22% of those saving for retirement are “very confident” that they are saving enough. Less than half (47%) of those who are saving still haven’t tried to determine how much they need to save for retirement.

Other studies indicate that financial literacy among women consistently lags that of men, CNBC reported. However, the TIAA-GWU study found that women have greater longevity literacy than men, with 43% of women demonstrating strong longevity knowledge, compared to 32% of men. 

Retire Comfortably

Annamaria Lusardi, an economist at GWU and director of the school’s Global Financial Literacy Excellence Center, called it a “striking result.”

Take Our Poll: How Do You Think the Economy Will Perform in 2023?
Discover: What Happens to Social Security When You Die?

“We might actually need to provide help to women because they are aware, for example, of the fact that they live long but they might not know about how to deal with their living long,” Lusardi told CNBC.

More From GOBankingRates

Share This Article:

facebook sharing button
twitter sharing button
linkedin sharing button
email sharing button
Retire Comfortably

About the Author

Vance Cariaga is a London-based writer, editor and journalist who previously held staff positions at Investor’s Business Daily, The Charlotte Business Journal and The Charlotte Observer. His work also appeared in Charlotte Magazine, Street & Smith’s Sports Business Journal and Business North Carolina magazine. He holds a B.A. in English from Appalachian State University and studied journalism at the University of South Carolina. His reporting earned awards from the North Carolina Press Association, the Green Eyeshade Awards and AlterNet. In addition to journalism, he has worked in banking, accounting and restaurant management. A native of North Carolina who also writes fiction, Vance’s short story, “Saint Christopher,” placed second in the 2019 Writer’s Digest Short Short Story Competition. Two of his short stories appear in With One Eye on the Cows, an anthology published by Ad Hoc Fiction in 2019. His debut novel, Voodoo Hideaway, was published in 2021 by Atmosphere Press.
Learn More

BEFORE YOU GO

See Today's Best
Banking Offers

1pximage