A Fidelity Research Institute study released today showed that pre-retirees are significantly underestimating the length of their retirement and how long their savings will need to last.
The study from the Boston-based Institute showed that these miscalculations will become increasingly problematic as the traditional guaranteed-income sources such as Social Security and defined benefit pensions begin to become a smaller part of person's retirement income.
According to the new analysis, pre-retirees believe they'll need to make their retirement savings last until an average of age 83.
But estimates show a healthy 65-year-old man has a 24% chance of living at least until 90 and a healthy woman that age has a 35% chance of reaching that same age.
The report, "Structuring Income for Retirement" indicates that 53% of pre-retirees are concerned about outliving their retirement savings.
The Institute highlights three basic lifetime income options for retirees, including lifetime income annuity with fixed or variable payments, variable annuity with guaranteed living income benefits for life and traditional systematic withdrawal plan with investments in stocks, bonds and cash.