Nearly one-third (31%) of Americans think there is a greater than 50% chance they will outlive their savings, according to Northwestern Mutual’s 2015 Planning & Progress study.
Additionally, 12% think there is a 100% chance they will outlive their savings, 24% are unsure if their savings will last, and 52% have not taken any steps to address the risk of outliving their savings. Only 22% have increased their savings and just 10% have purchased insurance to mitigate longevity risk.
Just under a third (30%) think it is not at all likely that Social Security will be there for them when they need it, but 52% think it is somewhat likely it will be there. Only 18% think it is extremely likely that Social Security will still be intact when they retire. The vast majority (79%) do not think Social Security will take care of their needs.
One-quarter of Americans (26%) don’t know what their safety net will be, and another 26% don’t think they will have a safety net. Furthermore, 79% do not think they will have saved enough to retire comfortably.
Among those age 69 and older, their biggest fear is facing an unplanned financial emergency, cited by 36%, followed by unplanned medical expenses (33%) and outliving their retirement savings (30%).
“Older Americans are closer to the reality of longevity risk, so they’re feeling it the most acutely,” says Steve Sperka, vice president at Northwestern Mutual. “But the takeaway from that—for every generation—should be the same. This is one of the most critical financial goals you’ll face in life. So, plan for it the same way you plan for other milestones—marriage, home purchases, children, college savings, estate planning and more. Addressing longevity now helps diminish the fear factor, as you age.”
Northwestern Mutual’s 2015 Planning & Progress study is based on a survey of 5,474 adults that Harris Poll conducted between January 12 and January 30. The full report can be downloaded here.