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More than half (53%) of U.S. adults are “working with inaccurate information” in terms of life expectancy, according to a new report from the TIAA Institute and George Washington University. The result is that many Americans could “jeopardize their retirement preparedness,” the report said.
Survey respondents were given four options to test their knowledge of life expectancy rates in the United States once someone reaches age 60, broken down between males and females. According to the Social Security Administration, men on average live another 22 years when they reach age 60, while women live another 25 years.
But fewer than four in 10 (37%) respondents in the TIAA-GWU survey answered correctly, demonstrating “strong longevity knowledge.” More than one-quarter (28%) responded “don’t know” and are considered to have “poor longevity knowledge.” Another 25% chose the response that underestimates life expectancy for a 60-year-old, while 10% chose the response that overestimates life expectancy.
“These findings are significant given that many Americans face the prospect of financial insecurity in retirement,” the report said. “The challenge is that longevity literacy, like financial literacy, tends to be low among U.S. adults.”
Among the other key findings cited in the report, based on a 2021 Survey of Household Economics and Decision-making, include the following:
- One-fourth of non-retired adults have no retirement savings.
- Only 40% of non-retirees think their retirement savings are on track.
- Among non-retirees age 60 and older, 13% have no retirement savings, while 48% don’t think their retirement savings are on track. Among those age 45-59, the percentages are 16% and 55%, respectively.
- Nearly 60% of non-retirees with retirement saving accounts report low levels of comfort in making investment decisions with their savings.
More recent data from the TIAA-GWU study found that 32% of workers don’t save for retirement on a regular basis, and only 22% of those saving for retirement are “very confident” that they are saving enough. Less than half (47%) of those who are saving still haven’t tried to determine how much they need to save for retirement.
Other studies indicate that financial literacy among women consistently lags that of men, CNBC reported. However, the TIAA-GWU study found that women have greater longevity literacy than men, with 43% of women demonstrating strong longevity knowledge, compared to 32% of men.
Annamaria Lusardi, an economist at GWU and director of the school’s Global Financial Literacy Excellence Center, called it a “striking result.”
“We might actually need to provide help to women because they are aware, for example, of the fact that they live long but they might not know about how to deal with their living long,” Lusardi told CNBC.
Source: gobankingrates
