Longevity is quickly becoming one of the largest unaddressed risks in retirement planning: The number of Americans living to 100 is expected to quadruple by 2054, yet most retirement plans aren’t built for 90 or 100-year lifespans. Yet despite this surge in longevity, new research from Nationwide Retirement Institute and The American College of Financial Services 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 survey highlights the urgency of this issue:
- Only 29% want to live to 100, citing financial and health concerns as the top reasons; roughly 3 in 4 worry they’ll run out of money before they run out of time
- Extending retirement horizons by just five years increases the risk of running out of money by 41%, though factoring in lower near-term asset returns increases that risk by more than 300%
- Despite the stakes, only 48% factor lifespan into their savings and investment decisions but 67% say they would pay more attention and save more if they knew they would live longer
These findings are part of Nationwide’s new Century Club campaign, which explores the financial implications of rising life expectancy. 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.
These findings send a clear message—retirement planning needs a major reset. Plan participants must shift their mindset, prioritizing longevity risk and placing a stronger emphasis on guaranteed income strategies that can weather uncertainty.
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“Too many people underestimate how long they’ll live—and that blindspot 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.”
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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 survey, and only 26% of respondents correctly estimated the longevity of a 65-year-old man according to the joint research.
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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.
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However, some effective solutions already exist, such as 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.
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Nationwide’s research shows that 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.
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“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.”
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The Nationwide Retirement offers a variety of tools and resources for employers and advisors:
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Reframe longevity. Plan sponsors, advisors and the broader retirement planning industry must help clients understand the implications of outliving average projections—especially for healthy, higher-income individuals and couples. Planning for 35+ years in retirement must become the norm, not the exception.
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“As Americans live longer, the risk of outliving retirement savings is growing,” said Rodriguez. “In fact, our study found that just five additional non-employed years in retirement significantly increases the risk of outliving savings – and U.S. Census Bureau data suggests that planning for a retirement that could last decades is critical. Employers have an opportunity to help their employees see that it’s not only about saving money for retirement, but also about having a plan for their income in retirement so they don’t outlive that savings.
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“While there’s been a great step in the right direction following SECURE Act 1.0 legislation that requires employer sponsored retirement plan savers now see a view of how their defined contribution plan savings may translate to monthly income in retirement, it’s not enough.
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“Employers can work with their benefits organization and retirement plan recordkeepers to bring more longevity planning into educational resources, offering personalized tools to project retirement needs, and providing access to investment options that lead to guaranteed income that employees can’t outlive.”
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Bridge the gap between knowledge and action. Tools like annuities and lifetime income solutions within employer sponsored retirement plans should be framed not just as financial instruments, but as enablers of confidence, independence, and dignity. “We believe that offering guaranteed income solutions within 401(k) and 403(b) and other defined contribution plans will become table stakes in the very near future. This will be a benefit that employees will look for when evaluating potential employers,” said Rodriguez.
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“With the rapid decline of pensions and life expectancy on the rise, employees are left to navigate the complex task of turning their savings into reliable income that lasts a lifetime. In- plan income options – like Nationwide’s protected retirement solutions – can help fill that gap by providing predictable, guaranteed income retirees can’t outlive.
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“These solutions make it easier for savers to visualize and map out their retirement plan, reducing the risk of running out of money in later years as employees prepare for retirements that could last decades. In addition to guaranteed income, these solutions can also be a powerful tool to address market volatility by offering a measure of downside protection, which is likely to resonate with many plan participants in light of recent market fluctuations.
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“Equally important, though, is education. Employers should help employees understand how these tools work and why they matter. With the right guidance and options in place, workers can make more confident, informed decisions about their financial future.”
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Close the literacy and preparedness gap. Educational efforts must go beyond basic financial knowledge. Special attention must be given to underserved and vulnerable populations—women, single adults, and lower-income individuals— who often face greater longevity risk without corresponding financial safeguards.
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