Almost of half retirees and pre-retirees in the U.S. underestimate average life expectancy, according to a new report.
The Society of Actuaries, Schaumburg, Ill., published this finding in a summary of results from its “2012 Risks and Process of Retirement Survey.” This sixth biennial study, conducted on the SOA’s behalf by Mathew Greenwald Associates and the Employment Benefit Research Institute, asked respondents about their views respecting longevity risk.
Approximately four in 10 respondents (43% of retirees and 38% of pre-retirees) underestimate average life expectancy by five year or more, the report reveals. Another two in 10 underestimate it by two to four years.
Four in 10 retirees (42%) and pre-retirees (41%) correctly respond that about half of 65-year-old men and women can expect to live until median life expectancy (age 83 for men and age 86 for women). Two in 10 (21% of retirees and 20% of pre-retirees), believe that fewer than half will live at least until that age, while approximately one-third (31%) and 36%, respectively) believe about 75% or more will live until then.
Typical retirees and pre-retirees see themselves living until age 84 (median for retirees) or 85 (median for pre-retirees). The report notes, however, that one-quarter of retirees (24%) and almost three in 10 pre-retirees (28%, up from 15% in 2005) think they will live until age 90 or later.