Americans can only afford to live to 83, survey finds

A new survey from life insurance technology company Ethos reveals that Americans believe their money will run out five years before they expect to die.

The survey of 1,000 U.S. adults found that the average American wants to live to 88 but believes their finances will support them only to age 83. Nearly one in six respondents (17 percent) expected their retirement savings to run out before they turned 80. When those with no retirement savings at all were included, that figure rose to 47 percent of Americans who either had nothing set aside or expected to deplete what they had before reaching 80.

The findings land at a moment when advisors are already navigating an intensifying conversation about longevity risk and the limits of employer-sponsored retirement plans.

The nursing home math doesn't add up

The survey's starkest data point involves long-term care. When asked to estimate the annual cost of a nursing home stay, respondents guessed an average of $60,829 or roughly 54 percent of the actual figure.

According to the Federal Long Term Care Insurance Program's 2024 Cost of Care Survey, administered by the U.S. Office of Personnel Management and conducted by illumifin, the national average for a semi-private room ran to $112,420 per year.

That gap matters for advisors whose clients are beginning to price out their later years. The Ethos data showed that confidence in being able to afford life to age 80 dropped across every generation once respondents were given real care costs to consider.

Gen Z saw the sharpest drop, falling from 61 percent to 51 percent. Baby boomers declined from 67 percent to 62 percent. For many clients, the numbers are arriving as a late-stage shock rather than an early-stage planning input.

As InvestmentNews has reported on the growing long-term care blind spot draining retirement savings,  middle-class Americans routinely plan to rely on Medicare for custodial care — a cost it does not cover.

What clients think their 401(k) will do

One of the survey's more consequential findings involves widespread misunderstanding of how defined contribution plans actually work.

Among Americans with a 401(k), 40 percent said they expected it to pay them a monthly check for life - a function a traditional 401(k) does not automatically provide. Among those who identified a 401(k) as their primary retirement vehicle, that figure climbed to 48 percent.

This misalignment between client expectation and plan reality is a known pressure point for advisors. Advisors helping clients navigate retirement risks in the RIA world have flagged longevity risk, not market risk, as the most financially consequential threat retirees face, one that rational clients should be willing to pay significantly to reduce.

The Ethos survey supports that instinct on the client side: 66 percent of respondents said they would rather receive a smaller guaranteed paycheck for life than hold a larger balance that could run out. If given the option, 33 percent said they would convert roughly half their retirement savings into a guaranteed income stream. Another 29 percent would allocate a quarter.

The advisor opportunity

Despite their anxiety about outliving their money, Americans in the survey showed a strong preference for protecting heirs over cutting back their own spending. If told they would live to 95, 36 percent said they would work longer and 36 percent would downsize or reduce their own lifestyle but only 4 percent said they would reduce what they planned to pass on to family.

That priority ordering has practical implications for advisors structuring estate and income plans. Clients who resist drawing down savings to fund their own care may leave themselves exposed to exactly the long-term care costs the survey finds they are underestimating.

As InvestmentNews has covered, advisors increasingly see long-term care as a critical piece of retirement planning that belongs in early client conversations, not as a product to sell late in the process, but as a planning assumption that changes the math on everything else.

The survey also found that more Americans were worried about dying too soon (47 percent) than about outliving their money, at 29 percent. Both fears reflect the same underlying concern: whether the people they leave behind will be financially secure.

For advisors, the Ethos data offers a concrete entry point: clients are already aware of the gap between what they hope for and what they expect to afford. The question is whether they have seen the real numbers for the care that gap most often involves.