Americans are Living Longer. Will Their Retirement Savings Stand Up to Greater Longevity?

Published on June 16, 2025

Among the calculations for retirement savings is longevity. Consider these numbers:

• In 1900, the average lifespan of men was only 46.3 and women 48.3.
• By 1946—the year in which today’s baby boomers began being born—lifespans had increased considerably: 64.4 for men and 69.4 for women.
• Forty years ago in 1985, men were reaching just over 71 years old and women a little over 78 years old.
• In 2023, the lifespan for men was 75.8 and 81.1 for women.
• The average U.S. life expectancy (across genders) for 2025 is 79.4 years

Given that the normal retirement age was 65 for decades (now 67 for those born in 1960 and later), this meant that generations ago, many people did not enjoy as many (or any) years of retirement as they do today. However, it is no longer unusual for people to live into their 90s or to reach centenarian status. Therefore, taxpayers who prepare for longevity in their retirement plan—and plan for several decades, not years, for their retirement savings to support them and their retirement goals—will have built in greater retirement security.

Women, take note: Although the gender gap is closing somewhat, the average life expectancy for women has been and continues to be longer than for men. So plan accordingly!.

Longevity literacy affects retirement savings

The TIAA Institute released a report in April (with the Global Financial Literacy Excellence Center) about workers’ expectations about longevity and retirement. In general, it found that people’s “longevity literacy” among American adults was poor.

From the report: “Given expectations about lifespan and retirement age, an estimated 20% of U.S. workers anticipate a retirement of at least 30 years, and one-half expect to be retired for 20 years or more. Only 15% expect fewer than 10 years of retirement.”

These expectations influence decision-making about working, saving, and lifestyle in later years.

Another study from Nationwide Retirement Institute and the American College of Financial Services revealed that less than half the respondents (48%) factored longevity into their savings and investment choices. However, most respondents also said they would make lifestyle and financial changes if they knew their lifespan would be longer.

According to the study, living just five years longer than planned for in the average American’s retirement savings increases the risk of running out of money by 41%; this percentage skyrockets to as high as 300% when factoring in lower near-term returns on investments.

In short, expectations about lifespan affect one’s retirement readiness and security. And advance planning for a long life and the costs to maintain one’s lifestyle (and health) means making sure you don’t outlive your savings.

This is especially true today, given the economic uncertainty and market volatility we’ve been experiencing this year. Baby boomers and Gen Xers have also lived through wild cycles following 9/11 and the Great Recession; for many people whose retirement portfolios were tied to stocks and bonds, recovery took a lot of patience, persistence, and fortitude.

While younger taxpayers had a longer time horizon to bolster their retirement savings during those downturns (as well as the pandemic’s effects on the economy), many retirees and near-retirees were worried about having to work longer or go back to work to save more for their later years—which could stretch through their 80s into their 90s or age 100.

Alternative assets can temper the effects of market volatility

Taxpayers with self-directed IRAs understand the value of long-term nontraditional investments that are not correlated with market performance—and that help build a more diverse retirement portfolio. The many alternative assets allowed in these tax-advantaged retirement plans are generally more illiquid and long term (such as real estate, private equity funding, commodities, precious metals, and royalties), and enable savvy investors to fill their mid-to-long-term allocation buckets with assets they already know and understand.

At Next Generation, our starter kits make it easy to open a new self-directed IRA (or solo K, HSA, or Coverdell ESA) and build retirement wealth with a broad array of alternative assets. And, thanks to our strategic partnership with iTrustCapital, our active clients can further diversify their portfolios when they open a sub-investment account to buy and sell cryptocurrency on iTrustCapital’s secure platform.

Looking for more insights into self-direction as a retirement wealth-building strategy? Feel free to view our webinars and sign up for our newsletter to receive news and updates about the many options available to investors with self-directed IRAs.