All about annuities
How long will you live
during retirement?
Many retirees live years longer than they think they will.
How long do you think you’ll live?
Do you have a number in mind? If so, how confident are you? While many of us think we have a sense of how long we'll live, it turns out that more than half of Americans don’t understand life expectancy in retirement.1 Knowing how long you're likely to live is important because it affects how you save for retirement—underestimate your life span, and you may run out of money.
In this article we'll talk about what life expectancy means, dispel common misconceptions and discuss how to ensure you have enough money to retire.
Americans are living longer than ever
The number of Americans aged 90 or older nearly tripled between 1980 and 2010, and that number is expected to triple again by 2040.3
So what is life expectancy?
Life expectancy is the average length of time someone can expect to live. In the aftermath of the Covid-19 pandemic many news outlets reported that life expectancy had gone down. If you’ve followed these reports, you may have heard that the average American life expectancy is about 77. While this is true, it’s also misleading. In fact, the average life expectancy of a 65-year-old American is about 85.2 Why the discrepancy?
The life expectancy we hear about on the news is usually based on CDC data, which calculates the average number of years a newborn baby will live. Unfortunately, not everyone who is born lives a long life. Early deaths are included in CDC calculations, lowering the overall life expectancy of the country. When you remove those who passed on at an early age, a different picture emerges. If you’ve made it to retirement, or 65 years old, you’re likely to live past 77—all the way to 84 for men and 86 for women.2 And fifty percent of people will live longer than that.
We’re living longer and longer, even if many of us don’t realize it. The number of Americans aged 90 or older nearly tripled between 1980 and 2010, and that number is expected to triple again by 2040.3
TIAA's longevity research
TIAA has been helping people retire with security for over 100 years. As a leader in this field, we conduct research that helps us continue supporting people’s financial well being. The TIAA Institute-GFLEC Personal Finance Index (P-Fin Index) looks at people’s knowledge about longevity and how that affects their retirement saving plans. Our research shows that only 37 percent of people have a strong understanding of how long they may live—and, perhaps unsurprisingly, those with low longevity literacy are less likely to save enough for retirement.1
Knowing how long you’re likely to live is important because it affects how you save for retirement—underestimate your life span, and you may run out of money.
How to make your retirement savings last
With people living longer, retirement savings need to last longer. One way to make your money go further is through a retirement annuity.
You can use an annuity to help grow your investments in your savings years. Then, when it’s time to retire, you can convert some or all of what you've saved into monthly retirement checks that can help replace your salary and last for the rest of your life.
TIAA Traditional* is our flagship annuity. When you invest with TIAA Traditional your savings are guaranteed to grow, no matter what’s happening in the stock market. When you’re ready to retire, you can activate monthly retirement checks, which you'll receive for as long as you live no matter how old you get. As of early 2024, TIAA had more than 1,500 people over 100 years old still receiving monthly retirement checks.
An annuity, whether it's TIAA Traditional or another, can help lower the risk that you’ll outlive your savings by ensuring you’ll have money coming in for as long as you live—even if that’s longer than you thought.
*TIAA Traditional is issued by Teachers Insurance and Annuity Association of America (TIAA), New York, NY.
Discover more
How TIAA shares profits with participants
TIAA has no external shareholders, so when we make a profit, we can share it with our TIAA Traditional participants instead of paying investors. Learn about how our profit-sharing model can help you create more retirement income.
Lifetime income
We’ve created a brand-new way to learn about lifetime income.
This material is for informational or educational purposes only and is not fiduciary investment advice, or a securities, investment strategy, or insurance product recommendation. This material does not consider an individual’s own objectives or circumstances which should be the basis of any investment decision.
All guarantees are based on TIAA's claims-paying ability. TIAA Traditional is a guaranteed insurance contract and not an investment for federal securities law purposes. Past performance is no guarantee of future results.
TIAA Traditional is a fixed annuity product issued through these contracts by Teachers Insurance and Annuity Association of America (TIAA), 730 Third Avenue, New York, NY, 10017: Form series including but not limited to: 1000.24; G-1000.4; IGRS-01-84-ACC; IGRSP-01-84-ACC; 6008.8. Not all contracts are available in all states or currently issued.
Transfers and withdrawals from TIAA Traditional are restricted by its underlying agreements that can affect the liquidity of the product. Converting some or all of your savings to income benefits (referred to as "annuitization") is a permanent decision. Once income benefit payments have begun, you are unable to change to another option.
TIAA may share profits with TIAA Traditional Annuity owners through declared additional amounts of interest during accumulation, higher initial annuity income, and through further increases in annuity income benefits during retirement. These additional amounts are not guaranteed beyond the period for which they were declared.
- Source:
The 2022 TIAA Institute-GFLEC Personal Finance Index . - Source: SSA Office of the Chief Actuary,
Unisex Life Expectancy at Birth and Age 65 . - Source: U.S. Census Bureau,
"90+ in the United States: 2006-2008," Nov. 1, 2011.