Retirees face a laundry list of financial risks: market risk, interest rate risk, inflation risk, health risk, to cite a few. Add to that litany yet another uncertainty: longevity risk.
It’s possible that in planning for your assets to last a lifetime, you could be in danger of seriously underestimating how long that lifetime might be. In compiling their 2024 Personal Finance Index, researchers at the TIAA Institute and the Global Financial Literacy Excellence Center at George Washington University asked a question about the average life expectancy of a 65-year-old. Only one-third of those responding knew the correct answer: age 84 for men and age 87 for women. Almost 60% either said they didn’t know or underestimated life expectancy.
