Playing the Long Game – Longevity Literacy and the Connection to Better Retirement Planning

As retirement planning evolves, different ways to think about it continue to emerge. One example of this is the concept of longevity literacy, which has gained prominence in recent years.

Longevity literacy refers to one’s understanding of the implications of an increased life span in relation to retirement planning. According to a recent TIAA Institute report, 53% of American adults lack a basic understanding of how long people tend to live in retirement. In addition:

  • Only 12% of U.S. adults have strong longevity literacy, meaning that they demonstrate an understanding of how long a 65-year-old today will live on average, as well as the likelihood of living to an advanced age versus the likelihood of dying relatively early.
  • 31% have weak longevity literacy, meaning they demonstrate a complete lack of understanding of how life expectancy changes as one gets older, reaches retirement age and lives beyond that age.

The Rise of Longevity Literacy

The growing interest in longevity literacy is due to two key factors:

  1. Over the past century, life expectancy has significantly risen in many parts of the world due to advancements in healthcare, technology and overall living conditions. Longer life spans have brought about the need for a deeper understanding of the financial implications of an extended retirement, particularly healthcare costs.
  2. Traditional retirement income programs, such as pensions and social security, may not adequately support individuals through longer retirement periods. As a result, there’s a growing need for individuals to take more responsibility for their financial futures in retirement.

Longevity literacy can help promote better retirement planning in several ways:

  • Extended retirement periods. Longevity literacy prompts individuals to consider how their savings and investments need to sustain them for a more extended period without a regular income. This consideration can help promote not only saving more in their employer-sponsored retirement plan, but starting to save earlier.
  • Healthcare costs. Longevity literacy involves comprehending potential medical costs in retirement and planning for them accordingly (such as saving through a health savings account [HSA]).
  • Asset management. Being aware of longevity encourages individuals to manage their assets more effectively, balancing risk and returns to ensure their resources last throughout retirement (or hiring a financial professional to help them do it).
  • Income generation. Longevity literacy prompts individuals to explore various income-generating options investments or part-time work to supplement retirement income over a longer period.
  • Social Security benefits. Longevity literacy helps ensure individuals optimize this source of income for extended retirement years. For example, the answer to the question of whether to take Social Security benefits early at age 62 versus waiting until full retirement age (or until age 70) becomes much clearer with stronger longevity literacy.

Retirement Partners of California Can Help!

We’ll design an Employee Financial Education Plan to help improve your 401k participant results.

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Disclosures, Sources, and Footnotes

Informational Resources:

Why longevity literacy is the secret to a prosperous longer life” (World Economic Forum, January 19, 2023);

An unrecognized barrier to retirement income security: Poor longevity literacy” (TIAA Institute, August 2023);

Enhance Your Longevity Literacy And Improve Your Retirement” (Forbes, February 16, 2023).

For plan sponsor use only, not for use with participants or the general public. This information is not intended as authoritative guidance or tax or legal advice. You should consult with your attorney or tax advisor for guidance on your specific situation.

Kmotion, Inc., 12336 SE Scherrer Street, Happy Valley, OR 97086;

©2024 Kmotion, Inc. This newsletter is a publication of Kmotion, Inc., whose role is solely that of publisher. The articles and opinions in this publication are for general information only and are not intended to provide tax or legal advice or recommendations for any particular situation or type of retirement plan. Nothing in this publication should be construed as legal or tax guidance; nor as the sole authority on any regulation, law or ruling as it applies to a specific plan or situation. Plan sponsors should consult the plan’s legal counsel or tax advisor for advice regarding plan-specific issues.

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