The New Retirement Risk Americans Aren’t Ready For

Columbus, OH – The number of Americans living to 100 and beyond is expected to quadruple by 2054, according to the U.S. Census Bureau. Yet despite this surge in longevity, new research from Nationwide Retirement Institute and The American College of Financial Services (“The College”) reveals a troubling disconnect: while lifespans are rising well into the 90s and beyond, financial planning hasn’t kept pace. As a result, millions face a growing risk of outliving their savings. 

The research—conducted as part of the Nationwide Retirement Institute’s Century Club campaign, which explores the financial implications and consumer sentiment related to rising life expectancy—highlights just how fragile the equation can be. According to The College’s research, extending a retirement by just 5 years from 30 to 35 years increases the risk of depleting savings by a striking 41%, based on historical market returns. And that risk only intensifies as lifespans continue to lengthen, particularly among healthy, higher-income retirees. 

A companion consumer survey from the Nationwide Retirement Institute shows most Americans are underestimating both their chances of living to 100 and the financial demands that kind of longevity brings. In fact, only 29% of respondents said they want to live that long, citing concerns about declining health and deep financial anxieties. Roughly three in four fear they’ll run out of money before they run out of time. 

Today’s volatile economic environment is raising the stakes even higher. According to the joint research, two out of five non-retired Americans (40%) now say they plan to delay retirement due to inflation. And the math is sobering when factoring in lower projected 10-year portfolio returns: Extending retirement by just five years increases the risk of running out of money by more than 300% according to The College’s analysis.  

These findings send a clear message—retirement planning needs a major reset. Both consumers and advisors must shift their mindset, prioritizing longevity risk and placing a stronger emphasis on guaranteed income strategies that can weather uncertainty. 

“Too many people underestimate how long they’ll live—and that blind spot can seriously undermine their financial security,” said Michael Finke, PhD, CFP^®, professor of wealth management, director of the Granum Center for Financial Security at The American College of Financial Services and co-author of the study. “We consistently see that those who plan for longevity feel more confident about retirement. The key drivers of that confidence? Working with an advisor, having access to guaranteed income, and building a plan that’s designed to last.” 

Knowledge is Power—and Protection 
Preparing financially for a longer life starts with one key step: considering how long you might live. Yet just 48% of Americans factor lifespan into their savings and investment decisions, according to the Nationwide Retirement Institute’s survey, and only 26% of respondents correctly estimated the longevity of a 65-year-old man according to the joint research. 

While the challenges of planning for longer lifespans are apparent, the Nationwide Retirement Institute’s consumer survey also reveals a powerful silver lining: if Americans knew they would live longer, many would take meaningful action to improve their physical and financial well-being: 

• 58% said they would adopt a healthier lifestyle 
• 67% would pay closer attention to their finances and increase their savings 
• 37% said they would delay retirement  
• 63% said they would take on less debt 

Mindset also matters. The College’s research found that optimists are 75% more likely to save at least 10% of their income – underscoring how a positive perspective can drive more financially secure retirements. The report also refers to financial literacy as “a quiet driver of retirement readiness.” 

“When people think seriously about living longer, it becomes clear that physical, mental, and financial health go hand in hand,” said Kristi Martin Rodriguez, leader of financial services marketing and the Nationwide Retirement Institute. “Just as we encourage healthy habits to support longer lives, we need to help build strong financial habits that ensure people can thrive well into their later years.” 

Solutions Exist – Now It’s Time to Use Them 
While 70% of Americans agree that society is not prepared to meet the needs of people with longer lifespans, the good news is that effective solutions already exist. These include long-term care (LTC) insurance and guaranteed income products, including annuities and protected retirement solutions that are available in a growing number of employer-sponsored retirement plans. The problem? These tools remain widely misunderstood or overlooked, highlighting a significant gap in consumer education. 

Nationwide’s research shows that nearly one-third of consumers (32%) believe long-term care insurance would be one of the most helpful resources for preparing to live to 100. Yet, only 1 in 10 actually report owning a policy, according to The College. The story is similar for annuities: 31% of consumers say an investment that guarantees income for life would help them feel more financially secure, but knowledge and adoption of these products remain stubbornly low. Additionally, in the past few years, a new type of investment option in workplace retirement plans that can provide guaranteed income in retirement has been gaining interest and garnering discussion across the country. This type of solution is growing but there remains an opportunity for the industry to encourage more widespread adoption of these solutions.   

“As the risk of longevity combined with today’s volatile market environment create what might seem like a perfect storm for retirement savers, the good news is that solutions exist to provide a measure of certainty in an uncertain environment,” Rodriguez said. “Financial professionals and others serving America’s retirement savers can play a critical role in bridging this gap, tailoring strategies to individual needs – especially for groups like women, who tend to live longer, score slightly higher in longevity literacy, yet report lower retirement confidence overall.” 

These findings from Nationwide and The College reveal a powerful truth: America is on the brink of a longevity revolution, yet many Americans are financially underprepared to meet it.  

The Nationwide Retirement Institute’s Total Retirement Income Planning initiative offers a variety of tools and resources for advisors to address the longevity challenge for clients.  

Nationwide Retirement Institute Methodology 
Edelman Data and Intelligence (DXI) conducted a national 15-minute online survey of n=1,000 U.S. consumers (age 18+), and n=200 U.S. workers ages 55-65 on behalf of Nationwide from February 18 – February 26, 2025.    

As a member in good standing with The Insights Association as well as ESOMAR Edelman Data and Intelligence conducts all research in accordance with local, national and international laws as well as in line with all Market Research Standards and Guidelines.  

American College Methodology  
The Retirement Income Literacy Study conducted by The American College of Financial Services measures financial literacy in 12 retirement-related knowledge areas among individuals approaching or in retirement age. Researchers from The College surveyed 3,765 Americans aged 50 to 75 in 24-minute online interviews conducted in August 2023. The data was collected to match the 2020 U.S. Census for gender and race. Other figures reflect the authors’ calculations based on publicly available data. See the full report for all source citations.