Planning for Retirement? Don't Underestimate Your Longevity
No one knows what the future brings, and we certainly have no clue how long we'll live; however, the average adult has no clue about their life expectancy. Research from the TIAA Institute reveals that only 35% of U.S. adults correctly answered a question about the life expectancy of a 65-year-old man and woman. According to the Social Security Administration, the average life expectancy for a 65-year-old is 84 for men and 87 for women.
Underestimating longevity can lead to under saving and claiming Social Security benefits too early, while overestimating may result in conservative spending. "It's common for people to assume they'll live until 80," says Chris Briscoe, Director of Financial Planning at Girard Advisory Services. However, life expectancy trends can be misleading. While life expectancy at birth has declined recently, individuals who reach 65 are likely to live longer.
Key Takeaways:
Genetics account for less than 7% of a person's lifespan.
A 65-year-old couple has a 25% chance of one partner living to 96.
Medical advancements have improved survival rates, hence longer lifespans.
Claiming Social Security benefits early can result in permanently reduced payments and holding off on claims until 70 can increase payments by 124%.
By understanding your potential longevity, you can make informed decisions about retirement planning and Social Security benefits.