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Women often don’t score as well as men in surveys of financial literacy. One area where they seem to do better is “longevity literacy,” or understanding how long they’re likely to live.

Longevity literacy is essential to smart retirement planning. Overestimate your longevity, and you could retire too late or scrimp too much. Underestimate it, and you could run short of money.

In a recent TIAA Institute study, 43% of women correctly estimated the life expectancy of 60-year-old women in the U.S. (The right answer was 85.) Only 32% of men chose the correct answer for the life expectancy for 60-year-old men, which was 82.

Men also were far more likely than women to underestimate life expectancy — and that’s a huge potential problem for both sexes. A man who expects to die in his 70s might draw too much from retirement funds or start Social Security too early. That could leave him — and the spouse who may outlive him — with too little income later on.

“A lot of people do OK in their first 10 or 15 years of retirement,” said actuary Steve Vernon, a former research scholar at the Stanford Center on Longevity. “It’s often in their late 70s and 80s that they start to struggle.”

Our life expectancy ‘grows’

The life expectancy statistics that often make headlines aren’t the ones that matter for retirement planning, Vernon said.

For example, in December, the Centers for Disease Control and Prevention noted that U.S. life expectancy dropped for the second year in a row.

But the number the CDC cited, 76.4 years, is life expectancy from birth. That figure includes infant mortality as well as the accidents, diseases, overdoses, homicides and suicides that end lives too early.

The thing about longevity is that it’s persistent. The longer you live, the longer you are likely to live.

One out of three men and 1 in 2 women in their mid-50s will live to 90, according to the Society of Actuaries. There’s a 50% chance that at least one member of a heterosexual married couple age 65 will be alive at 92.

With longer lives comes “longevity risk” — the chance that people will outlive their savings. Understanding and addressing that risk is an important element of retirement planning, but most Americans are falling short, said Surya Kolluri, head of the TIAA Institute, which conducts research on financial security.

More than half of Americans don’t understand how long people tend to live in retirement, according to a 2022 survey of more than 3,500 adults nationwide by the TIAA Institute and the Global Financial Literacy Excellence Center at the George Washington University School of Business.

How to minimize your risk

The single most powerful way to mitigate longevity risk is to delay claiming Social Security, Vernon said.

Social Security retirement benefits can start as early as age 62, but applying before your full retirement age — which is currently between 66 and 67 — means your check is permanently reduced.

Delaying your application beyond full retirement age can add 8% each year you wait until your benefit maxes out at age 70.

Delaying is particularly important for the higher earner in a married couple, since it’s the higher earner’s benefit that determines what the survivor gets after the first spouse dies.

A 2022 paper for the National Bureau of Economic Research found that virtually all American workers ages 45 to 62 should delay their applications beyond age 65 to maximize their benefits, and that more than 90% should wait until age 70. But currently, only about 10% of applicants wait that long, the researchers found.

“Most people just don’t understand how long they could live in retirement, and they don’t plan for it,” Vernon said.

Liz Weston is a columnist at NerdWallet, a certified financial planner and the author of “Your Credit Score.”

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