Longevity, one of the major risks investors face in retirement, is also one of the furthest things from their minds. A survey by Bankers Life and Casualty found 87% of middle-income Americans over 55 said they don’t spend much time thinking about how long they might live in retirement.
That may be because for many people, their longevity is simply out of their hands. About two-thirds said the determining factor in how long they will live was genetics. Less than half said eating right and exercising would affect their life span. Additionally, 60% of respondents said their best years were still ahead.
The Boomer Project polled 500 Americans between the ages of 55 and 75 with annual household incomes between $25,000 and $75,000 for the survey for Bankers Life.
For those who are talking about their longevity, it’s primarily a health concern, rather than a financial one. Half of respondents said they were speaking with their doctor or spouse about longevity. Just one-fifth said they were talking to an advisor. Furthermore, when asked to name their main longevity concern, most people said declining health, not outliving retirement assets.
“Considering longevity and the risks of outliving retirement savings is a first step in developing and achieving health, income and even personal goals for a satisfying retirement,” Chris Campbell, vice president of marketing and business development at Bankers Life and Casualty Co., said in a statement.
Retirement is still a source of anxiety though, with 62% saying they felt some level of anxiety. Just over a fifth said they had calculated a goal for their monthly retirement income, and 13% have calculated a total savings goal.
When they do think about the impact longevity could have on their finances, two-thirds of respondents understand that even if they do meet their retirement savings goal, it doesn’t necessarily mean they won’t outlive their savings. Forty-two percent are aware that they could live for more years than they have saved for and 28% said they could work until age 65 and still not have enough saved for retirement.
Concerns about Social Security and misunderstandings about how it works could also be contributing to retirement anxiety. More than two-thirds of respondents said they were concerned about the future of Social Security, and 38% said “Social Security as we know it” would be gone in the next 20 years.
While 84% of respondents said Social Security benefits were part of their plan for retirement income, they could be relying too heavily on them. Almost three-quarters of respondents who are already receiving benefits said they make up at least half of their retirement income. The Social Security Administration puts the national average at 65% of people who rely on benefits for at least half of their income.
In addition to leaning too heavily on their Social Security benefits, some respondents just don’t understand how they work. Over a third didn’t know they could increase their benefits by delaying when they start claiming them, and almost half thought an annual cost of living increase was a guarantee.