People nearing retirement often underestimate how much money they’ll need in their golden years, and – to make matters worse – they also underestimate how long they will live.
This can add up to a financial double whammy.
The average life span in the US is between 75 and 80. But life expectancy rises with age. A man who reaches age 80 can expect to live to 82, a woman to 85.
“On average, people have gained an additional 20 years of life expectancy since 1960,” according to the World Economic Forum. “To put it another way, society is almost gaining an additional day every week.”
Understanding these facts and planning your retirement accordingly is one aspect of what economists call “longevity literacy.” A 2022 survey illustrated the extent of longevity illiteracy: one in four respondents underestimated how long a person of 60 would be expected to live, while one-third said they had no clue.
Longevity literacy has three prongs: (1) quality of life, (2) financial resilience, and (3) purpose.
“Longevity literacy empowers individuals to live a healthy and sustainable life with dignity and purpose, while building resilience to address the challenges of an evolving world,” says this article.
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7 Factors to Consider for Your Twilight Years
Here are some excerpts from the article “Retirees Are Underestimating How Long They Will Live,” by Daniel De Vise in The Hill:
- More than two-fifths of baby boomers have no retirement savings.
- The median boomer household had $134,000 in retirement savings in 2019.
- The average American life span in 1900 was 47 years. By 1950, life expectancy had risen to 68.
- U.S. lifespan peaked at 79 in 2019, before dropping during COVID
- Women have greater longevity literacy than men.
- Many Americans rely on Social Security for their retirement income; Social Security monthly payments average around $1,800.
- Almost 50 percent of Americans have no retirement plan at work.
- Workers who do save for retirement rarely save enough.
Here is a Boston College National Retirement Risk Index.
Here is an Age Well Planner.
Here is a retirement income calculator.
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