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Top Charts 22-04: Longevity pessimism

Question:

How good are people at estimating their own life expectancy?

Answer:

It turns out, not very good!

On average, respondents to our recent Longevity, lifestyle and retirement perception survey, 2022 significantly underestimate how long they will live – exhibiting a phenomenon known as “longevity pessimism”. This is true for women and men in Canada, the UK and the US, with greater magnitude for women, the strongest effect in the UK and the smallest in the US.

The chart below shows the average differences between Club Vita’s calculated life expectancy (based on age, sex, ZIP code/post code/postal code) and survey responses to the question “To what age do you expect to live?”.

Source: Club Vita’s Longevity, lifestyle and retirement perception survey, 2022. A survey of 3000 people aged 40-60 across Canada, the UK and US. Full details in the report.

Key takeaways:

  • Men and women across Club Vita’s three geographies on average all underestimated their life expectancy – exhibiting “longevity pessimism”.
  • Longevity pessimism could significantly impact later-life financial well-being. If people underestimate how long they will live, they expose themselves to the risks of undersaving, overspending and running out of money in retirement.
  • It also means they will undervalue guaranteed lifetime payment offerings such as annuity contracts or workplace Defined Benefit pensions

We’ve explored the phenomenon of longevity pessimism and how it relates to levels of retirement savings and healthiness of lifestyles in our recent survey. You can download the report here:

Club Vita’s Longevity, lifestyle and retirement perception survey, 2022.

We’ll be presenting the results of our survey as well as a discussion around behavioral drivers of mortality in an upcoming webinar on Wednesday 27th April. Further details and a link to the (free) registration page are here:

Do you care enough? Behavioral drivers of longevity and retirement outcomes.

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