MOST RETIREES EVENTUALLY must grapple with whether their savings will last through their golden years. “It’s one of the biggest financial threats retirees will face,” says Paul Yakoboski, a senior economist for the TIAA Institute, the research arm of New York-based financial services provider TIAA. But they also have to guess how long their golden years might last. A majority of people are guessing wrong—at least when it comes to the average life expectancy—and that mistake has practical implications for how they plan, fund and enjoy their retirement, according to a recent survey by the TIAA Institute and the Global Financial Literacy Excellence Center at The George Washington University in Washington, DC. Less than two-fifths, or 37 percent, of those surveyed, correctly estimated the average life expectancy for men and women in the U.S., according to the research, which is included in the 2022 edition of the two organizations’ annual Personal Finance Index (P-Fin Index). One-quarter underestimated the average life expectancy, while 28 percent answered, “I don’t know.” And ten percent overestimated the average life span. The average 60-year-old man can expect to live to 82, while the average 60-year-old woman can expect to reach 85. The survey did not ask people to estimate their own life expectancy, which can be affected by one’s health and genes. Last year was the first time the institute and center asked about longevity literacy—defined as knowledge of average life expectancy—in the six years they have been publishing the index. It was added as part of a broader effort to understand people’s readiness for retirement, says Yakoboski, a co-author of the index. “All of that should have implications not only for preparing for retirement, saving and planning, but also once people are in retirement and managing the savings that they accumulate,” Yakoboski says. Understanding Longevity Study Shows Many People Don’t Plan For Long Life Spans By Joel Berg Paul Yakoboski 30 REVERSE MORTGAGE / MAY–JUNE 2023
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