Americans are increasingly unaware of how long the average retiree will live during retirement.
A new study by the TIAA Institute and the Global Financial Literacy Excellence Center (GFLEC) at the George Washington University School of Business (GWSB), along with data from the 2023 Personal Finance (P-Fin) Index survey, finds that just 35% of Americans know the average lifespan of retirees.
The findings, which surveyed both workers and retirees, show that only 12% of Americans have strong longevity literacy, while 31% averaged weak scores. When asked what is the likelihood that a 65-year-old will live at least until age 90, 68% did not answer correctly. And, when asked about the likelihood of living after age 70, another 54% answered incorrectly.
Men were likelier to demonstrate weak longevity literacy at 32%, compared to 29% of women.
“Longevity literacy is particularly important since retirement income security inherently involves planning, saving and preparing for a period that is uncertain in length,” said Surya Kolluri, head of the TIAA Institute, in a statement. “Our research clearly demonstrates a lack of longevity literacy among the vast majority of U.S. adults. Improving this can promote better retirement security and mitigate longevity risk.”
In fact, TIAA’s research points to a connection between longevity literacy and improved retirement readiness. Of those who scored stronger longevity literacy scores, half had determined the amount they need to save for retirement, compared to 32% of those with weak longevity literacy.
Seventy-two percent of respondents with stronger scores are saving for retirement on a regular basis, compared to 58% of those with weak longevity literacy. Additionally, 69% are confident about having enough money to live comfortably throughout retirement, compared to 53% of those with weak scores; and 76% with high scores are confident they are saving an adequate amount, compared to 66% of those with small scores.
Among retirees with high literacy scores, 77% say their current lifestyle meets or exceeds their pre-retirement expectations, relative to 62% of those with weak literacy; and 82% are confident they’ll have enough to live comfortably in retirement, compared to 69%.
TIAA notes how obscure terminology like “life expectancy” can confuse individuals because they don’t understand the real-life effects behind the word. The research found that among adults with weak literacy, 81% do not have a practical understanding of the term “life expectancy,” and 47% responded “don’t know” when asked about the meaning of the term.
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Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.
