If you are planning for a 20-year retirement, you may already be behind. Americans are living longer, yet many retirement plans still assume shorter lifespans. The gap creates a growing risk that savers will outlive their money. Research from the Nationwide Retirement Institute with the American College of Financial Services and from the TIAA Institute with GFLEC points to a consistent pattern. People underestimate how long they might live, underuse tools that hedge longevity risk, and worry deeply about running out of savings.
Longer Lives, Bigger Financial Risk
Demographers expect the number of centenarians in the United States to multiply by mid-century. That shift is good news for health and medicine, but it amplifies financial risk. Extending retirement by five years increases the likelihood of depleting assets by roughly 41 percent, according to recent analyses. The risk compounds as lifespans lengthen, since portfolio withdrawals stretch across more years and face more market cycles. Healthier and higher-income retirees are often the most exposed, because they are likely to live longer and may support higher spending standards.
What Americans Think vs. What the Data Show
Public perception has not caught up with reality. Many people misjudge their odds of reaching age 100, which leads to planning horizons that are too short. Fewer than a third say they want to live to 100, often citing worries about health quality and whether their money would last. About three-quarters report anxiety about outliving their savings, a fear that has intensified with recent market volatility. Inflation and tempered return expectations are already influencing behavior, with roughly 40 percent saying they plan to postpone retirement.
Confidence Rises When Plans Assume Longer Life
The studies converge on a simple insight. People who plan for longer life expectancy tend to feel more confident about retirement. That confidence is strongest when three elements show up together. Ongoing engagement with a financial professional, access to guaranteed income sources, and a written plan that explicitly accounts for long lifespans and market uncertainty form a powerful combination. Treating longevity as a central planning assumption, rather than a tail risk, helps align spending with sustainable income.
Solutions Exist, Yet Many Go Unused
There are tools designed to manage longevity and eldercare risk, but adoption remains low. Long-term care insurance can protect assets from high-cost health events later in life. Annuities and other guaranteed income products can convert savings into paychecks that last as long as you do. Many employer-sponsored plans now include lifetime income options and long-term care features, making access easier than it was a decade ago. Even so, these solutions are often underutilized, in part because of misunderstanding, unfamiliarity, or concerns about complexity. Better consumer education can help people evaluate trade-offs and integrate the right mix of protections into their plan.
Longevity Expectations Rarely Change Retirement Age
New evidence from the TIAA Institute and GFLEC shows a weak link between how long people expect to live and when they plan to retire. Expected retirement duration does correlate with expected lifespan, yet it seldom prompts a later retirement age. Even among those who think they will live past 90, fewer than a third say they will wait until 70 or beyond to retire. On average, each additional year of expected lifespan translates to only about one extra month of planned work. Institutional features, such as Social Security claiming rules, and cultural norms appear to shape timing decisions more than personal longevity estimates.
How Long Workers Expect Retirement to Last
Across the workforce, the median expected retirement length is 20 years. A slight majority foresee at least two decades of retired life. One in five anticipate 30 years or more, while nearly half expect fewer than 20 years, with a notable minority planning for fewer than 10. Younger workers, especially Millennials and Gen Z, are more likely than Gen X to anticipate 30-plus years in retirement, which aligns with broader longevity trends. Women more often expect retirements of at least two decades than men, reflecting longer average lifespans and possibly different planning mindsets.
What Employers, Advisors, and Policymakers Can Do
Planning practices need to stretch time horizons and stress-test portfolios for extended lifespans, sequence risk, inflation, and potentially lower long-run returns. Employers can expand plan menus and defaults that deliver lifetime income and address late-life care, paired with clear, plain-language education on costs and benefits. Advisors should tailor guidance by household. Healthier and higher-income clients may need firmer guardrails to counter optimism about both longevity and market returns. Gender and generational differences in expectations should inform communication styles and product recommendations. Discussions about retirement timing should focus on realistic longevity, not just benefit eligibility ages, so that claiming decisions and work plans support lifetime sustainability.
The Bottom Line
The population is aging into longer retirements faster than current planning norms recognize. The result is a growing risk that even diligent savers will exhaust their nest egg. Closing the gap requires better education about longevity, wider use of income guarantees and long-term care protections, and planning frameworks that are built to preserve spending over a much longer life. If you plan for a longer journey, your money is more likely to go the distance.