The old model of aging – which in our book we call DefaultAging — created a landmark date: 65.
That was when you were supposed to “retire,” And retirement was what you were supposed to have been “saving up for.” You spent your working years accumulating a nest egg — public pension, private pension, private savings and investments — and that would fund your life past “retirement.”
Nice and simple.
Bur how long is that funding supposed to last? In the new world of SuperAging, you could have 20 or 30 years (or even more) past age 65. But how many years, exactly? How do you know? How do you plan?
As reported here, surveys show the answer is all over the map. But women seem to have a better grasp of the numbers, than men.
According to actuarial tables, a 65-year-old woman can expect to live to 87. Only 36% of women in a national survey of 3,503 adults correctly guessed that number. 26% guessed low. But men did worse — about 10 percentage points worse, erring on the low side.
In sum, people don’t realize how much longer they may actually live.
This, of course, has very serious consequences when it comes to financial planning. Underestimating your potential longevity creates the serious risk of outliving your money.
Understanding longevity — or what the experts call “longevity literacy” — is gaining increased attention in financial planning circles. Those who have strong longevity literacy are much more likely to have robust post-retirement income plans. But researchers from the TIAA Institute (Teachers Insurance and Annuity Association of America) estimate that only 12% of adults fall into that category.
That explains part of our mission here at SuperAging — to spread the word not only about the exciting new horizons of longevity, but also about what you have to do to take maximum advantage.
One good step is to go through a thought exercise: calculate how long you think you’ll live, then assume it’s 10% or 15% too low, and then see how you’re placed, financially, to deal with the higher number.
(Photo credit: Takasuu at iStock by Getty)