Americans are living longer — but not financially prepared
Americans are living longer than ever — but their finances aren’t going quite as far. A new study by John Hancock and MIT AgeLab uncovered that many Americans aren’t emotionally or financially prepared for the demands of a longer life.
The report, the Longevity Preparedness Index (LPI), surveyed Americans’ readiness to age well. It measured readiness in eight areas: social relationships, activities of daily living, care, home, neighbourhood and community, life transitions, health, and finances.
Following a survey of over 1,300 adults, researchers discovered that the overall score was a mere 60 out of 100 — indicating that most individuals are falling short when it comes to preparing for their older age. The lowest scores were in such areas as care, housing, finance, and health, all of which are essential for a secure retirement.
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A growing senior population
The study also discovered a deep demographic shift. Americans 65 and older are expected to grow from 58 million today to 82 million by 2050. Okay, that’s a reflection of improved health care and living longer. It’s also a warning that more individuals will turn to retirement plans, Social Security, and long-term care systems already strained.
According to the report, nearly four out of 10 adults could be financially insecure in retirement. Some have not saved anything, and others have not talked or planned out how they will pay for medical or long-term care costs.
Perhaps the most troubling figure in the report was the few Americans who had made arrangements for future care. The care preparedness score averaged only 42 out of 100, the lowest of the eight categories.
The majority of adults polled indicated they don’t know who would care for them if they got ill or could no longer take care of themselves. Many also confessed they haven’t communicated with loved ones or family members about costs or care wishes.
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John Hancock CEO Brooks Tingle characterized the findings as demonstrating that while some Americans are preparing for longer life spans, “there is much more our industry can and should be doing to help customers.”
Experts urge small steps toward better planning
MIT AgeLab director and founder Dr. Joe Coughlin described building longevity readiness as not necessarily overwhelming. “Taking small but deliberate steps – such as planning a new activity, starting exercise or other physical activity, or having a care conversation – can lead to a better future and really make a big difference in how we live our later years,” he stated.
MIT AgeLab and John Hancock plan to update the Longevity Preparedness Index every year for four years. They will track whether Americans are becoming more financially prepared, connected in their communities, and healthier.
Financial stress in retirement
Most financial experts say that it is no surprise Americans are not prepared. Healthcare, housing, and living costs keep rising, and still, few employees save enough. In a study done in 2024, it was found that the average retiree has a six-figure healthcare expense upon retirement.
Bankrate financial analyst Stephen Kates described to FOX Business how retirement has changed. “Retirement has become a stage of life in and of itself, often lasting two decades or more for many couples and individuals,” Kates stated. “Rather than being the quiet final chapter of life, it has become an active second act for tens of millions of individuals who want to see the world, start business ventures, volunteer, or finally get around to long-delayed hobbies.”
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Living longer means planning smarter
As people live longer — generally 20 to 30 years beyond retirement — the question is how to fund the years. Kates said that “making careful decisions about where and how to live can significantly improve retirement readiness.”
That may mean cutting back, relocating to a lower-cost area, or reconstituting investment and saving plans.
Finally, the study is an alarm call: ageing well is a blessing, but it requires planning. With too little savings, health insurance, and family conversations, those extra years might be spent in fiscal anxiety and not freedom and peace of mind.
