By Surya Kolluri and Paul Yakoboski


Retirement readiness means financial preparation for a post-work life that could last three decades or more. Unfortunately, most Americans don’t understand how long people tend to live in retirement— a sensibility known as longevity literacy that matters for successfully managing a retirement portfolio during both accumulation and decumulation.

In a survey of U.S. adults by the TIAA Institute and the Global Financial Literacy Excellence Center, only 37% demonstrated “strong longevity literacy” by correctly identifying life expectancy at age 60.1 10% of respondents overestimated life expectancy at 60, while 25% underestimated it. 28% responded “don’t know” and are considered to have “poor longevity literacy.” All told, more than one-half of adults (53%) demonstrate a lack of longevity literacy which can jeopardize their retirement readiness.

In fact, the same data show that longevity literacy is associated with better retirement readiness. Retirees with strong longevity literacy were more likely to plan and save for retirement while still working. Among those with strong longevity literacy, 81% saved regularly for retirement and 54% tried to determine how much they needed to save. The analogous figures among retirees with poor longevity literacy were 57% and 30%, respectively.

In addition, among retirees who saved for retirement, those with strong longevity literacy tended to know more about ways to draw income from savings during retirement: 42% reported having a lot of decumulation knowledge compared with 27% of those with poor longevity literacy.2

Not surprisingly then, retirees with strong longevity literacy more often experience better financial outcomes. 83 percent enjoy a lifestyle that meets or exceeds pre-retirement expectations, 40% typically find it very easy to make ends meet, and 40% are very confident that they have enough money to live comfortably throughout retirement.3 The analogous figures among their peers with poor longevity literacy are 63%, 23%, and 25%, respectively.

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