“Longevity Literacy” — And Why It’s Critical in 2023 and Beyond
by Michael Hodin
As we enter 2023, population aging has already emerged as a defining issue not just for the next year, but for the remainder of the 21st century. From the alarm over China’s population decline to a landmark United Nations aging report, governments and societies worldwide are grappling with a fundamental mismatch. Today, we enjoy unprecedented longevity, with more than 2 billion people over-60 by 2050 and more older people than young in all societies as they modernize — yet policy and societal models remain mired in a bygone era of shorter lifespans and predominantly younger populations.
How, then, can we adapt for an older world where we can increasingly expect to live to a hundred?
While top-down policy leadership will play an important role, a key piece missing from the current discussion is the individual and their understanding of this new reality — our collective “longevity literacy.” That’s the term coined by vital new research, from the TIAA Institute and George Washington University’s Global Financial Literacy Excellency Center, which finds less than half of Americans can accurately say how long the average person will live after age 60. When presented with three options, most said they didn’t know or underestimated.
This misperception constrains financial planning and security, as people underestimate how much they’ll need to pay for the full length of their lives. Keep in mind, too, that an average is just that — many people will live for years longer. Certainly, we all hope to do so — but we must also plan to do so, with concrete strategies for how we earn, save, and invest, as well as spend, manage costs, and stay healthy in our later decades.
Surya Kolluri, head of the TIAA Institute, underlined the implications: “If you don’t have a realistic understanding of how long you are likely going to live, you are missing one of the most foundational components of any plan: a time horizon. If we can improve people’s longevity literacy, we can help create better retirement plans and increase their confidence.”
Longevity literacy can help to jumpstart the needed change. According to the report, those with strong longevity literacy were more likely to save for retirement while working (81% versus 57% of those with poor longevity literacy), try to calculate the overall amount they need to save (54% vs. 30%), and be confident about living comfortably through retirement (40% vs. 25%).
These findings suggest several key areas to help people prepare for lifelong financial health.
First, expand longevity literacy. Since employers already provide a trusted network of resources, they can use existing channels to increase awareness of longevity’s implications for retirement planning. The financial services industry can also adjust their approach, especially financial advisors. Guidance should move beyond one-size-fits-all actuarial tables, focusing instead on clients’ specific priorities, expectations, and resources in the context of longer lives.
Gender is a key consideration in these discussions. According to the report, women have significantly greater longevity literacy than men — 43% compared to 32%, respectively — but lower levels of overall financial literacy. And, of course, women simply live longer on average. These gaps and differences should be addressed for sound financial preparedness, especially for a couple who may have different levels of longevity risk.
Second, embrace the health-wealth connection. These are two sides of the same coin. Poor health and chronic disease can lead to cascading medical and long-term care costs that rapidly deplete savings. That’s why healthy aging is critically important, both for individuals’ quality of life and for the sustainability of public budgets. Initiatives like the UN Decade of Healthy Ageing should be viewed as not just a healthcare imperative, but a financial one as well.
Third, update policy for the new dynamics of longevity. Governments can launch campaigns to build awareness of these shifts, as well as institute policies that encourage saving and investment. In addition, public and employer policies can better enable people to extend their careers, launch new ones, or explore new, different ways of working for longer. This is a necessity as workforces age and individuals look to extend their earning years.
Finally, we must continue to amplify the aging conversation, including insightful, leading-edge research. While there is growing attention on this topic, too often the discussion centers on outdated assumptions or alarmist narratives. Instead, we need new concepts, strategies, and frames of reference that better reflect modern longevity, what it makes possible, and how people can take advantage.
By focusing here, we can empower individuals and families to build wealthy, healthy lives that run for decades past 60 — the foundation for thriving societies in an aging world.
Michael W. Hodin is the CEO of the Global Coalition on Aging.
