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‘Longevity literacy’: women have a more accurate understanding of longevity than men
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‘Longevity literacy’: women have a more accurate understanding of longevity than men

New calculation in the annual Personal Finance (P-Fin) Index shows ‘longevity literacy’ is key to being prepared financially for retirement.

Welcome to our #147 weekly newsletter.

“For women taking control of their financial future”

-Jana Hlistova


From The Purse


In this week’s newsletter, we focus on the annual report published by the Personal Finance (P-Fin) Index (US), which found that 53% of American adults do not know how long people live in retirement, even though women tend to have a better idea than men.

‘Longevity literacy’ tends to have a high impact on people’s retirement planning and therefore how much money they have to retire on.

And don’t forget to sign up for our event Thursday, 19th January at 6pm UK time.

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I hope you enjoy this week’s newsletter.

Jana


‘Longevity literacy’: women have a more accurate understanding of longevity than men

New calculation in the annual Personal Finance (P-Fin) Index shows ‘longevity literacy’ is key to being prepared financially for retirement.


To ensure quality planning for retirement, people need to understand how long they are likely to live in retirement.

But according to the Personal Finance (P-Fin) Index, an annual survey of more than 3,500 adults in the US, 53% of Americans underestimate how long people live in retirement ie they have low levels of ‘longevity literacy’.

Women (43%) seemed to have a more accurate view of how long they would live, compared to men (32%). This is in contrast to financial literacy levels, where men tend to rank higher.

Why is ‘longevity literacy’ important?

Based on the survey, people who incorporate a time horizon in their retirement planning are more likely to save for retirement and, unsurprisingly, will have more money in retirement as a result.

According to Annamaria Lusardi, University Professor at GW and GFLEC's Academic Director:

“This research shows that if we want to create better retirement outcomes, we need to start by making sure people understand how long they are going to live in retirement..”

Here are the key results from the survey: (people still in the workforce & retirees)

  • 81% saved for retirement while they were working, compared to 57% of those with poor longevity literacy.

  • 54% have tried calculating the overall amount they need to save, compared to 30% of those with poor literacy.

  • 40% find it very easy to make ends meet – almost twice as many as those with poor literacy (23%).

  • 40% are very confident about having enough money to live comfortably throughout retirement, compared to 25% of those with poor literacy.

  • Only 17% said they have a lifestyle that falls short of their pre-retirement expectations. For those with poor literacy, more than twice as many (37%) agreed.

One possible explanation for women having higher ‘longevity literacy’…

…is that they have traditionally been more influential in making healthcare decisions in the household compared to men. Also, women are aware that they tend to live longer than men (by an average of 7 years).

Given that women are still paid less than men, tend to take more career breaks, work part-time, save and invest less money therefore accumulate less wealth over their lifetime, it is crucial that women apply their ‘longevity literacy’ to their retirement planning.

Join us Thursday, 19th January at 6pm UK time to talk about closing the gender wealth gap and how to manage your money.

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