A surprising number of Americans, 54% according to a recent Corebridge Financial report, aim to live to the age of 100. Much of the report, spanning 20 pages, focuses on the financial implications of such a long lifespan. Lina Walker from AARP highlights the financial challenge of funding 35 years of retirement if one retires at 65.
Considering the standard advice from financial planners to plan for 80% of your pre-retirement income during retirement, a household with a median income might need around $60,000 annually. Given the average retirement age of 62 and aiming to live to 100, this translates to a total retirement budget of approximately $2.3 million over 38 years. Although Social Security will cover a portion, the sheer amount required is daunting, with only 27% of survey respondents feeling confident they won’t outlive their retirement savings.
Moreover, two-thirds of the surveyed participants admit to fearing the depletion of their retirement funds more than death itself, based on the 2023 survey by Morning Consult involving 2,284 adults.
Statistically, it's unlikely that half of us will reach 100, but the number of centenarians is on the rise, expected to reach 422,000 by 2054, a significant increase from about 101,000 today. Demographic analysis shows that currently, 78% of centenarians are women, and 77% are white.
The concern among retirement experts is that many will run out of their retirement savings long before their life ends, impacting not only their quality of life but also placing a financial burden on their families. Larry Fink of BlackRock has also voiced concerns about the impending retirement crisis, emphasizing the need for an organized effort to ensure future generations can live their later years with dignity.
According to the 2023 Retirement Confidence Survey from the Employee Benefit Research Institute, 64% of American workers feel they have enough to live comfortably throughout retirement. However, the average American believes they need $1.27 million to retire comfortably but has saved only $89,300 towards this goal as found in a report by Northwestern Mutual.
Less than half of Americans have any retirement accounts, which adds to the anxiety about how retirement will be funded, especially as the shift has moved from traditional pensions to 401(k) and IRA plans that require more personal management and strategic planning for the money to last until 100.
Many Americans underestimate their life expectancy, with life expectancy increasing with age. While the average lifespan for an American man is 73.5, this rises to 85 if he reaches 70. Despite many older adults expecting to die before 85, the aspiration to live to 100 is common across all age groups, possibly because reaching such an age seems more achievable than ever before.