Ethos, a life insurance technology company, surveyed 1,000 U.S. adults about retirement expectations. The results reveal a gap between how long Americans expect to live and how long they believe their savings will last.
Respondents expect to live to age 88 but think their retirement savings will run out by age 83. Among those with retirement savings, 17% expect the money to deplete before age 80. When including people with no retirement savings, that share rises to 47%.
Long-term care costs are a major factor in this shortfall. Survey respondents estimated nursing home care at $60,829 per year on average. The actual national average for a semi-private room is $112,420 annually, according to the Federal Long Term Care Insurance Program's 2024 cost of care survey. That gap underestimates true expenses by roughly 54%.
When shown the actual figures, confidence in affording to live to age 80 dropped across all generations. Gen Z saw the steepest decline, falling from 61% to 51%. Baby boomers' confidence fell from 67% to 62%. Medicare does not generally cover custodial long-term care, leaving retirees to pay from personal savings or other sources.
The survey also exposed confusion about how retirement accounts work. Among those with a 401(k), 40% expected the account to pay a monthly income for life, which a traditional 401(k) does not automatically provide. That rose to 48% among respondents who named a 401(k) as their primary retirement savings vehicle.
When asked about trade-offs, 66% of respondents said they would prefer a smaller guaranteed lifetime income over a larger balance that could eventually run out. Another 33% said they would convert roughly half their retirement savings into guaranteed income if possible, while 29% would convert a quarter.
Despite concerns about running out of money, most Americans hesitate to reduce inheritances. If told they would live to 95, 36% said they would work longer and 36% would downsize their lifestyle. Only 4% said they would cut planned inheritances.
More respondents worried about dying too soon (47%) than outliving their money (29%).