Only 1/3 of Americans Know the Average Lifespan of Retirees: Why Is The Data Important?
Data shows that only a third of our country’s inhabitants can accurately pen down the average lifespan of someone retired. Yet, this bit of information is no trivial piece of trivia.
This overlooked nugget of knowledge can impact you in significant ways, especially while charting the course of your retirement.
The Average Lifespan of Retirees
Let’s lay down the cold, hard facts. In the United States, as of 2021, well-researched data shows that the average retiree is expected to live an additional 20 years post-retirement.
However, don’t forget the word – “average.” This is not a one-size-fits-all forecast. There are various elements at play here. Here are the most important ones.
- Personal health: Pre-existing health conditions, risk factors for new diseases, and genetic factors all influence lifespan.
- Lifestyle: Habits like regular exercise, a balanced diet, and the absence of destructive habits like smoking or heavy drinking considerably impact your lifespan.
- Socioeconomic status: Believe it or not, your socioeconomic status plays a role, too. According to a study published in IJMA, higher-income Americans tend to live longer than their lower-income counterparts.
Why Lifespan Data is Crucial in Retirement Planning
The average lifespan is more than just a number. It’s a stepping stone and a guiding post. It’s a tool that helps to make practical, sound plans for your retirement life. When you understand this, you have a gauge to guide your decisions on:
- The age you wish to retire.
- The sum you need to save.
- The way to distribute your resources during retirement.
In the absence of this understanding, you might face the risk of outliving your savings. However, a well-thought-out plan based on lifespan data can ensure that you live your retirement years in financial security and comfort.
Misconceptions About Retirement
Retirement conjures up sundry images – idyllic vacation getaways, novel hobbies, spending quality time with loved ones, or simply a relaxed, worry-free existence.
But, the reality of retirement isn’t quite as monochrome as a constant holiday, nor is it as mundane as pinching every penny. Sadly, the very nature of retirement is marred by misunderstandings and misconceptions, primarily owing to a lack of a clear grasp of average lifespan data.
- Underestimating required savings: A misstep that some individuals make is not quantifying correctly the treasure chest they’ll require for their retirement voyage. According to a survey by USA Today, a considerable percentage of 401(k) participants believe they’ll need less than $1.8 million for retirement. They couldn’t be more off-course. Given the increasing lifespan, coupled with inflation and climbing healthcare costs, our needs during retirement will be substantially more than what many of us anticipate.
- Overestimating active years post-retirement: On the flip side, another misconception is an overestimate of the active, adventure-filled years one can enjoy post-retirement. A study from the Stanford Center on Longevity reveals that while people can expect to live longer, they might not necessarily be in the best of health during those additional years. Overestimating the number of active years can result in disillusionment and unexpected hurdles in the later stages of retirement.
Having the true picture of lifespan data emerges as our knight in shining armor here, rescuing us from harboring unrealistic expectations about retirement.
Make no mistake: retirement planning isn’t about fostering a sense of dread but about equipping ourselves better so we can savor our well-earned freedom, independence, and peace of mind.
How to Use Lifespan Data in Your Retirement Plan
It’s clear that the average lifespan data is critical. But how do you put that information to use? Here’s how.
- Reset your savings goal: If you take the average lifespan into account, you’re likely to save more and be better prepared for the long haul.
- Consider your future health needs: As you age, healthcare costs could escalate. Planning now helps in handling any increased needs.
- Design your retirement years: Retirement is often pictured as a homogenous block of time. It’s not. There’s the active stage, the slowing down stage, and then the stage where you might need assistance. Plan accordingly.
Looking back, we reaffirm the high value of knowing the average lifespan data while planning your retirement. Don’t just brush it aside. Instead, let it guide you when preparing for your non-working years. So, whether you do it yourself or seek the aid of a financial planner, keep this pencil tip in mind.