You may outlive your money—by a lot—and most retirement plans are still gambling you won’t.
Story Snapshot
- Retirement planning is dangerously out of sync with rising life expectancy.
- Few Americans recognize the true risk of outliving their savings.
- Guaranteed income products and long-term care tools remain underused despite their potential.
- Confidence grows when plans realistically assume longer lifespans and market volatility.
America’s Retirement Math Problem: Lifespans Are Outpacing Planning
Most Americans still stake their retirement strategy on a 20-year window, but actuarial tables are rewriting the rules. The number of centenarians in the United States is on track to multiply by mid-century, and this demographic shift has already warped the landscape for retirees. Extending retirement by even five years hikes the risk of depleting your assets by over 40 percent. The longer you live, the more market downturns and inflation cycles you must weather, and the greater the chance your nest egg cracks under pressure. Higher-income and healthier retirees, often confident in their prospects, are paradoxically the most exposed simply because their odds of living longer—and spending more—are higher.
Few are truly ready for this new era. Despite headlines and annual statements, most people underestimate their longevity. Fewer than a third of Americans say they want to live to 100—often citing fears of poor health or financial ruin as the reason. Yet, three-quarters admit anxiety about outliving their savings, and that anxiety has sharpened with recent market turmoil. Inflation and lowered expectations for future returns have already led 40 percent to plan on postponing their retirement. The disconnect between what Americans hope for and what the data shows is growing wider by the year.
Confidence Is Built on Longer Time Horizons and Better Tools
Studies from leading retirement research institutes converge on one key insight: people who plan for longer life expectancy feel more secure about their financial futures. The strongest confidence emerges when three elements align—ongoing engagement with a financial professional, access to sources of guaranteed income, and a written plan that directly tackles the realities of longevity and market swings. Treating a long life as a standard planning assumption, not a remote “what if,” helps retirees align spending with sustainable income and sleep easier at night.
Despite this, tools that directly address longevity risk are often ignored. Long-term care insurance can shield assets from catastrophic health costs late in life, and annuities can transform savings into paychecks that last as long as you do. More employer-sponsored plans now include lifetime income and long-term care features, yet adoption remains stubbornly low. Many potential users remain skeptical, confused by complex terms, or simply unaware these products exist. The solution is better consumer education—people need clear, honest guidance to weigh the trade-offs and assemble a portfolio that matches both their risk and their runway.
Retirement Age: Culture Trumps Longevity Awareness
Recent data shows a persistent gap between how long Americans expect to live and when they plan to retire. Even those who believe they’ll live past 90 rarely say they will wait until age 70 to retire. On average, each extra year added to expected lifespan only nudges planned retirement later by a single month. The rules of Social Security and prevailing workplace culture still shape decisions more than personal forecasts of longevity. Gen Xers and Baby Boomers, in particular, stick to a median expected retirement length of 20 years, while Millennials and Gen Z are more likely to anticipate retirements stretching 30 years or more. Women, who statistically live longer, are also more likely to plan for multi-decade retirements. These trends underscore a critical point: unless planning frameworks adapt, many Americans will find their money running short in the final chapters of life.
Employers, advisors, and policymakers all hold levers that could shift the odds. Employers can expand plan options and defaults to include lifetime income and long-term care, demystifying the choices with straightforward education. Advisors should tailor guidance, especially for healthier and higher-income households at greatest risk of optimism bias. Gender and generational differences matter—communication must adjust accordingly. And discussions about retirement timing should pivot from mere eligibility to real longevity risk, so that every American’s plan aligns with the lengthening journey ahead.
