If they live longer than expected, 48 percent of Americans ages 45 to 70 haven't financially planned for the possibility of outliving assets or the rising cost of health care, according to a survey released by the Society of Actuaries.
The survey also found that more than a third of Americans ages 45 to 70 worry they will run out of money during retirement, but only 20 percent plan to purchase an annuity or some other protection that provides a guaranteed lifetime income stream. Most respondents, 71 percent, plan to claim Social Security before age 70, even though claiming Social Security later in life helps hedge against the risk of outliving assets.
Three-quarters of Americans ages 45 to 70 protect their tangible assets, such as housing, with renters insurance or home insurance, but only 19 percent plan to buy long-term care insurance, according to the survey. The survey findings were based on an online poll of 1,006 people ages 45 to 70 and had an error rate of plus or minus 3.1 percentage points.
"With the challenges in the housing and financial markets over the past few years, coupled with the fact that people are living longer, many baby boomers are finding themselves unprepared to maintain their lifestyle in retirement," said Anna Rappaport, president of Anna Rappaport Consulting in a statement. "As actuaries, we cannot stress enough the importance of having a plan in place that addresses all of the risks individuals may face in retirement, such as spending available assets too soon, meeting financial care needs, paying for the rising cost of health care and adjusting financially and otherwise to the loss of a spouse."